[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]



 
DEFINING FEDERAL INFORMATION TECHNOLOGY RESEARCH AND DEVELOPMENT: WHO? 
                    WHERE? WHAT? WHY? AND HOW MUCH?

=======================================================================

                                HEARING

                               before the

                SUBCOMMITTEE ON TECHNOLOGY, INFORMATION
                POLICY, INTERGOVERNMENTAL RELATIONS AND
                               THE CENSUS

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                              JULY 7, 2004

                               __________

                           Serial No. 108-251

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpo.gov/congress/house
                      http://www.house.gov/reform








                 U.S. GOVERNMENT PRINTING OFFICE

97-999                 WASHINGTON : 2004
_________________________________________________________________
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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana                  HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut       TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana              CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California                 DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky                  DANNY K. DAVIS, Illinois
JO ANN DAVIS, Virginia               JOHN F. TIERNEY, Massachusetts
TODD RUSSELL PLATTS, Pennsylvania    WM. LACY CLAY, Missouri
CHRIS CANNON, Utah                   DIANE E. WATSON, California
ADAM H. PUTNAM, Florida              STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia          CHRIS VAN HOLLEN, Maryland
JOHN J. DUNCAN, Jr., Tennessee       LINDA T. SANCHEZ, California
NATHAN DEAL, Georgia                 C.A. ``DUTCH'' RUPPERSBERGER, 
CANDICE S. MILLER, Michigan              Maryland
TIM MURPHY, Pennsylvania             ELEANOR HOLMES NORTON, District of 
MICHAEL R. TURNER, Ohio                  Columbia
JOHN R. CARTER, Texas                JIM COOPER, Tennessee
MARSHA BLACKBURN, Tennessee          BETTY McCOLLUM, Minnesota
PATRICK J. TIBERI, Ohio                          ------
KATHERINE HARRIS, Florida            BERNARD SANDERS, Vermont 
                                         (Independent)

                    Melissa Wojciak, Staff Director
       David Marin, Deputy Staff Director/Communications Director
                      Rob Borden, Parliamentarian
                       Teresa Austin, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel

   Subcommittee on Technology, Information Policy, Intergovernmental 
                        Relations and the Census

                   ADAM H. PUTNAM, Florida, Chairman
CANDICE S. MILLER, Michigan          WM. LACY CLAY, Missouri
DOUG OSE, California                 STEPHEN F. LYNCH, Massachusetts
TIM MURPHY, Pennsylvania             ------ ------
MICHAEL R. TURNER, Ohio

                               Ex Officio

TOM DAVIS, Virginia                  HENRY A. WAXMAN, California
                        Bob Dix, Staff Director
            Ursula Wojciechowski, Professional Staff Member
                         Juliana French, Clerk
            Adam Bordes, Minority Professional Staff Member


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 7, 2004.....................................     1
Statement of:
    Fossum, Donna, manager, RaDiUS project, RAND Corp.; Edward 
      Lazowska, co-Chair, President's Information Technology 
      Advisory Committee and Chair, Department of Computer 
      Science and Engineering, University of Washington; William 
      Scherlis, professor, School of Computer Science at Carnegie 
      Mellon; and Stephen Squires, chief science officer, vice 
      president, Hewlett-Packard.................................    55
    Nelson, Dr. David, Director, National Coordination Office for 
      Information Technology Research and Development (Executive 
      Office of the President); Dr. Peter Freeman, co-Chair of 
      Interagency Working Group and Assistant Director, Computer 
      and Information Science and Engineering Directorate, 
      National Science Foundation; Dr. Hratch Semerjian, Acting 
      Director, National Institute of Standards and Technology; 
      and Dr. C. Edward Oliver, Associate Director, Office of 
      Advanced Scientific Computing Research, U.S. Department of 
      Energy.....................................................    10
Letters, statements, etc., submitted for the record by:
    Clay, Hon. Wm. Lacy, a Representative in Congress from the 
      State of Missouri, prepared statement of...................     8
    Fossum, Donna, manager, RaDiUS project, RAND Corp., prepared 
      statement of...............................................    58
    Freeman, Dr. Peter, co-Chair of Interagency Working Group and 
      Assistant Director, Computer and Information Science and 
      Engineering Directorate, National Science Foundation, 
      prepared statement of......................................    24
    Lazowska, Edward, co-Chair, President's Information 
      Technology Advisory Committee and Chair, Department of 
      Computer Science and Engineering, University of Washington, 
      prepared statement of......................................    73
    Nelson, Dr. David, Director, National Coordination Office for 
      Information Technology Research and Development (Executive 
      Office of the President), prepared statement of............    14
    Oliver, Dr. C. Edward, Associate Director, Office of Advanced 
      Scientific Computing Research, U.S. Department of Energy, 
      prepared statement of......................................    41
    Putnam, Hon. Adam H., a Representative in Congress from the 
      State of Florida, prepared statement of....................     4
    Scherlis, William, professor, School of Computer Science at 
      Carnegie Mellon, prepared statement of.....................    85
    Semerjian, Dr. Hratch, Acting Director, National Institute of 
      Standards and Technology, prepared statement of............    33
    Squires, Stephen, chief science officer, vice president, 
      Hewlett-Packard, prepared statement of.....................    97


DEFINING FEDERAL INFORMATION TECHNOLOGY RESEARCH AND DEVELOPMENT: WHO? 
                    WHERE? WHAT? WHY? AND HOW MUCH?

                              ----------                              


                        WEDNESDAY, JULY 7, 2004

                  House of Representatives,
   Subcommittee on Technology, Information Policy, 
        Intergovernmental Relations and the Census,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:30 a.m., in 
room 2154, Rayburn House Office Building, Hon. Adam Putnam 
(chairman of the subcommittee) presiding.
    Present: Representatives Putnam and Clay.
    Staff present: Bob Dix, staff director; John Hambel, senior 
counsel; Ursula Wojciechowski, professional staff; Juliana 
French, clerk; Felipe Colon, fellow; Michelle Ash, minority 
senior legislative counsel; Adam Bordes, minority professional 
staff member; and Cecelia Morton, minority office manager.
    Mr. Putnam. A quorum being present, this hearing of the 
Subcommittee on Technology, Information Policy, 
Intergovernmental Relations and the Census will come to order.
    Good afternoon and welcome to the subcommittee hearing on 
``Defining Federal Information Technology Research and 
Development. Who? Where? What? Why? and How much?'' the purpose 
of this hearing is to examine the extent of Federal funding for 
and the leveraging of information technology research and 
development across agencies, academia and industry.
    By addressing the basic questions, this subcommittee hopes 
to identify the following: How many different agencies of the 
Federal Government are currently engaged in conducting or 
managing IT research and development; is there an overall 
strategic plan that provides an opportunity to leverage 
investments, both internally and externally, and to identify 
complementary activities in an effort to avoid duplication; how 
much is being spent on an annualized basis on information 
technology R & D; where and how these investments are actually 
being made; what are the outcome measurements and expectations 
associated with those investments; is there a defined set of 
goals and objectives or focus areas that are targeted by these 
efforts and what have been the recent results; what is the role 
of the academic community and the private sector, and how are 
these partnerships created and maintained?
    The Federal Government funds research and development to 
meet the mission requirements of the departments and agencies. 
Advances in the uses of IT research and development are 
continuing to change the way those Federal agencies 
communicate, use information, deliver services and conduct 
business. The technology and expertise generated by this 
endeavor may have applications beyond the immediate goals or 
intent of federally funded research and development. Federal 
support reflects the consensus that while basic research is the 
foundation for many innovations, the rate of return to society 
as a whole generated by investments and such work is 
significant.
    The potential benefits of federally funded R&D related to 
information technology are endless. Federally funded programs 
have played a crucial role in supporting long term research 
into the fundamental aspects of computing. The unanticipated 
results of research are often as important as anticipated 
results. The Internet, electronic mail and instant messaging 
were by-products of government funded research from the 1960's. 
Another aspect of government funded IT R&D is that it often 
leads to open standards, something that many perceive as 
beneficial, encouraging deployment and further investment.
    Previous oversight hearings conducted by this subcommittee 
have identified an important missing link in the cyber security 
arena that requires further attention in the research and 
development area. We have learned that inadequate tools exist 
today to conduct necessary quality assurance testing of 
existing and emerging software and hardware products that could 
better identify flaws, defects and other vulnerabilities prior 
to deployment. With a renewed commitment on the part of 
software and hardware manufacturers to quality and security of 
the products they introduce into the marketplace, a 
collaborative approach to developing more mature testing tools 
are essential to improved protection of computer networks and 
the information assets they contain.
    The outcomes achieved through public and private funding 
programs create a synergistic environment in which both 
fundamental and application driven research is conducted, 
benefiting government, industry, academia and the public. 
Government funding appears to have allowed research on a larger 
scale and with greater diversity, vision and flexibility than 
would have been possible without government involvement.
    It is important to recognize collaborative efforts across 
programs and agencies and stress the importance of leveraging 
efforts with academia and the private sector. Universities, 
private companies, and Federal labs are important partners in 
this endeavor. It will be productive to explore new methods to 
encourage increased activities by other parties in the 
innovation process, particularly if the goal is to continue the 
technological advancement which has been so instrumental to 
this Nation's economic growth and high standard of living.
    Because investments in science and technology have resulted 
in unparalleled economic growth as well as the standard of 
living and quality of life, we must emphasize the importance of 
supporting the efforts of IT R&D. Advances have been possible 
only with the support of the public and private investment in 
R&D, according to the President's budgets. Yet challenges 
continue. There are many R&D needs vying for a limited amount 
of R&D dollars. Federal research and development program 
managers face tough choices in deciding where the money should 
go and how much is appropriate for information technology.
    Further, it is important to ensure that Federal agencies 
are not pursuing conflicting goals. It is essential that 
agencies, universities and industry move toward a more 
coordinated, unified approach. Multiple Federal agencies will 
need to coordinate their efforts to ensure that new 
understanding of information technology and network security is 
generated and that this knowledge is transitioned into useful 
products. Academia will have developed and expanded degree 
programs to ensure that an adequate work force exists to put 
new tools and techniques into practice. The private sector has 
a critical role to play, as it will contain the developers and 
suppliers as well as the major purchasers of new IT 
technologies and services.
    Government sponsorship of research, especially in 
universities, helps develop the IT talent used by industry, 
universities, and other pieces of the economy. When companies 
create products using the ideas and work force that results 
from federally sponsored research, they repay the Nation in 
jobs, tax revenues, productivity increases and global 
leadership.
    We need a strong strategic plan to ensure that IT R&D is 
being used to maximize improvement and mission goals and 
performance. federally funded research and development are key 
endeavors within the respective agencies and in cooperation 
with universities in the private sector. It is essential to 
meet vital Federal needs and sustain global leadership in 
science and in the engineering of information technology.
    I welcome today's distinguished panel of witnesses and look 
forward to their testimony and the opportunity to explore these 
matters in greater detail.
    At this time I would like to recognize the distinguished 
ranking member of the subcommittee, Mr. Clay, for his opening 
statement. Mr. Clay.
    [The prepared statement of Hon. Adam H. Putnam follows:]
    [GRAPHIC] [TIFF OMITTED] 97999.001
    
    [GRAPHIC] [TIFF OMITTED] 97999.002
    
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    Mr. Clay. I thank the chairman for holding today's hearing 
on what is an important but often overlooked portion of our 
government's research and development portfolio. The Federal 
Government will spend approximately $60 billion on the many 
different components of information technology during fiscal 
year 2004. In contrast, the fiscal year 2004 budget only 
allocates $2.2 billion for the Networking and Information 
Technology Research and Development Program, a minimal amount 
considering the role of higher performance computing and 
technology in our mission to enhance government efficiency, 
accessibility and security for all citizens.
    Although funding for IT research and development has 
increased fourfold since 1990, along with an increased 
coordination throughout multiple agency participants for such 
activity, there is a disconnect between the level of government 
funding and its importance in the development of a strong IT 
work force and premier academic institutions.
    Furthermore, the government's role in IT research and 
development fosters the creation of common criteria and open 
standards that both government and private industry can utilize 
for their benefit. When focused, the government's investments 
in IT research often results in jobs, economic growth, and a 
higher standard of living in both quantitative and qualitative 
terms. Moreover, such resources permits our Nation to remain on 
the cutting edge of technology in vital areas, including health 
care, education, manufacturing, and the basic sciences.
    This concludes my remarks, Mr. Chairman, and I ask that 
they be included in the record.
    [The prepared statement of Hon. Wm. Lacy Clay follows:]
    [GRAPHIC] [TIFF OMITTED] 97999.004
    
    [GRAPHIC] [TIFF OMITTED] 97999.005
    
    Mr. Putnam. Without objection, they will be included in the 
appropriate place in the record.
    At this time we will move to the administration of the 
oath. If our witnesses would please rise and raise your right 
hands.
    [Witnesses sworn.]
    Mr. Putnam. Note for the record that all the witnesses 
responded in the affirmative, and we will move to our first 
panel's testimony. I would ask that all of our panelists adhere 
to the 5-minute rule for your opening statements and we will 
have successive rounds of questions from the panel to get to 
all of your issues.
    Our first witness is Dr. David Nelson. Dr. Nelson is the 
Director of the National Coordination Office for IT Research 
and Development and a member of the Senior Executive Service. 
He is responsible for the coordination of planning, budget and 
assessment activities for the Federal networking and 
information breakthrough that advance the science of IT.
    Dr. Nelson is cochair of the Interagency Working Group for 
the NITRD program. Dr. Nelson joined the NCO from NASA, where 
he was Deputy CIO with primary responsibility for information 
technology security of all NASA systems and additional 
responsibilities in scientific computing and enterprise 
architecture. He previously served at the Department of Energy, 
which he joined from Oak Ridge National Labs, where he was 
research scientist working mainly in theoretical plasma physics 
and its applications to fusion energy. He is the author of 
numerous papers in theoretical plasma physics, computational 
science and research policy. He has twice received the 
President's Meritorious Rank Award for superior sustained 
managerial performance.
    Welcome to the subcommittee. You are recognized for 5 
minutes, Dr. Nelson.

STATEMENTS OF DR. DAVID NELSON, DIRECTOR, NATIONAL COORDINATION 
  OFFICE FOR INFORMATION TECHNOLOGY RESEARCH AND DEVELOPMENT 
  (EXECUTIVE OFFICE OF THE PRESIDENT); DR. PETER FREEMAN, CO-
  CHAIR OF INTERAGENCY WORKING GROUP AND ASSISTANT DIRECTOR, 
 COMPUTER AND INFORMATION SCIENCE AND ENGINEERING DIRECTORATE, 
   NATIONAL SCIENCE FOUNDATION; DR. HRATCH SEMERJIAN, ACTING 
 DIRECTOR, NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY; AND 
 DR. C. EDWARD OLIVER, ASSOCIATE DIRECTOR, OFFICE OF ADVANCED 
    SCIENTIFIC COMPUTING RESEARCH, U.S. DEPARTMENT OF ENERGY

    Dr. Nelson. Thank you, Mr. Chairman and members of the 
subcommittee. I have submitted my written testimony to the 
subcommittee and ask that it be entered into the record, and I 
will limit my oral testimony to a brief summary of four points.
    Let me start by saying that I agree with many of your 
opening comments, both from the majority and the minority side, 
with regard to the importance of information technology 
research and development, and I think that agreement will be 
shown through my oral testimony.
    First, I would like to discuss the Networking and 
Information Technology Research and Development Program. This 
program derives from authorization in the High Performance 
Computing Act of 1991.
    For fiscal year 2005 the President's budget requests 
slightly over $2 billion for the program in 13 participating 
agencies. The program supports long-range research as well as 
research infrastructure, such as research computer centers and 
research networks. Performers include universities, Federal 
research centers and laboratories, national laboratories and 
federally funded research and development centers, private 
companies, and nonprofit organizations. Research is funded by 
the participating agencies through grants, cooperative 
agreements, contracts, and other authorities. The agencies work 
together under the program to identify research needs, plan 
research programs, and review progress.
    I brought along one copy of planning research needs. This 
is in the high confidence software and systems research area 
and was developed by one of the coordinating groups under the 
program.
    Agencies may coordinate their selection of research 
performers through joint solicitations and coordinated proposal 
reviews. The program interacts with stakeholders through 
workshops and other meetings and disseminates research results 
through publications, reports and presentations. Often 
activities under the program are conducted jointly with other 
Federal programs that benefit from information technology.
    Historical accomplishments include the High Performance 
Computing and Communications Initiative in the early 1990's 
that helped create modern computational science, parallel 
supercomputers, the modern Internet and Mosaic, the first 
graphical Web browser. The Next Generation Internet Initiative 
in the late 1990's helped to create the technology for today's 
high bandwidth optical networks and demonstrated the basis for 
today's high performance network computing.
    The program receives advice and guidance from the 
President's Information Technology Advisory Committee, which 
was authorized in the High Performance Computing Act. Members 
of the committee are drawn from the private sector, and I 
believe Dr. Ed Lazowska, cochair of the committee, is 
testifying before the subcommittee today.
    Let me turn to my second main point. This concerns the 
value of the government's historical investment in information 
technology research. In 1995, the National Research Council 
documented the return on this investment. The study cited 
numerous examples of information technologies whose roots lay 
in federally funded research or that were nurtured through 
critical development periods by Federal research. Examples 
include network technology in the Internet, the Web browser, 
computer windowing, computer graphics, reduced instruction set 
computers, design of very large scale integrated circuits, data 
storage technology, and parallel computing architecture.
    In 1999, the National Research Council extended its 1995 
conclusions, citing additional contributions to technology and 
to the economy. Federal information technology research also 
returns value directly to government operations through at 
least two pathways, the first through government purchase of 
commercial off-the-shelf information technology products that 
have been invented or improved through Federal research. The 
second pathway is through the development of special 
information technology needed for government missions. This is 
clearly shown in the government's research and development 
programs, where many of the specialized information 
technologies have been invented or developed by the Networking 
and Information Technology R&D Program, often in direct 
partnership with the program intending to use those 
technologies.
    Let me turn to my third point. This concerns the value of 
current Federal investments in IT research. The Networking and 
Information Technology R&D Program is currently working in 
areas such as improving the quality and reliability of 
software, improving the security of operating systems, 
applications and networks, making it easier and more productive 
for humans to interact with computer systems, including access 
by individuals with disabilities, managing resources 
distributed over the Internet, applying computer modeling and 
simulation to scientific and engineering fields, detecting and 
responding to natural or man-made threats, managing information 
intensive dynamic systems and supporting lifelong learning.
    Of perhaps special interest to this subcommittee is 
research in information security. Federal agencies are funding 
applied research to better enable us to cope with security 
weaknesses in the architecture of operating systems, networks 
and applications, as well as fundamental research, 
investigating ways to improve the intrinsic security of these 
architectures. The President's Information Technology Advisory 
Committee is currently studying this area and will issue 
recommendations regarding Federal research investments.
    A specific example of the value of current Federal 
investment concerns Google, and it may serve to illustrate the 
value of this research generally. The Digital Libraries 
Initiative is an ongoing part of the program that has been 
sponsored by NSF, NASA, DARPA, and NIH. A recent article points 
out that Google, the search engine company that is about to 
issue a very significant initial public offering of stock, owes 
its technology directly to a Digital Libraries Initiative grant 
to Stanford University. Under this grant the cofounders of 
Google invented, developed and tested their search algorithms.
    My final point concerns the management of IT research. 
Federal research programs have benefited from talented research 
managers in the agencies and in funded projects. Because 
research deals directly with the unknown and unanticipated, it 
must be managed deftly. Often research failure becomes success, 
as intractable obstacles point the way to alternative 
approaches. Both Federal program managers and researchers must 
have good instincts regarding when to continue the proposed 
research and when to abandon or modify it.
    Structures for managing and overseeing federally funded 
research should allow program managers to alter projects in 
midcourse in response to preliminary results and need to 
recognize that research projects can produce valuable results 
even if they do not achieve their original objectives. Failure 
to manage deftly risks stifling creativity and innovation. The 
history of information technology research demonstrates the 
benefits of a flexible approach, and this approach is 
consistent with the administration's R&D investment criteria.
    This concludes my remarks. I thank the committee for the 
opportunity to testify.
    [The prepared statement of Dr. Nelson follows:]
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    Mr. Putnam. Thank you very much. I would ask the remaining 
witnesses to please try to adhere to our 5-minute rule and 
check the lights on the table.
    Our next witness is Dr. Peter Freeman. Dr. Freeman is the 
assistant director for the Computer and Information Science and 
Engineering Directorate. He was previously at Georgia Institute 
of Technology as professor and founding dean of the College of 
Computing since 1990. From 1987 to 1989 he served as division 
director for computer and computational research at the 
National Science Foundation and helped to formulate the High 
Performance Computing and Communications Initiative of the 
Federal Government. In addition to his many activities as dean 
at Georgia Tech, he headed an NSF-funded national study of the 
IT worker shortage, started an active group for deans of IT and 
computing, and published several papers relating to future 
directions of the field. He received his Ph.D. in computer 
science from Carnegie Mellon, his M.A. in mathematics and 
psychology from UT Austin, and his B.S. in Physics from Rice. 
His research and technical expertise has focused on software 
systems and their creation.
    We welcome you to the subcommittee. You are recognized.
    Dr. Freeman. Thank you, Chairman Putnam, Ranking Member 
Clay. Good afternoon. It is a pleasure to be here this 
afternoon and to have the opportunity to testify before you and 
to discuss information technology R&D. Let me begin by 
clarifying some terms that I think we will all be using this 
afternoon.
    It is important to understand that the subject of today's 
hearing, IT R&D, is open to multiple interpretations that can 
lead to misunderstandings and to differences in reported 
activity levels. For example, it is often reported that a 
company spends a huge sum on IT R&D, but a closer examination 
almost always reveals that the vast majority of that sum is 
actually spent on development, not research. In the past, the 
term ``information technology'' was usually taken to refer to 
data processing activities such as payroll, accounting or 
inventory, not the full range of work to which the term now 
often refers. I would note that the Federal R&D community 
primarily uses the more general meaning of the term 
``information technology.''
    Definitions of research and development are notoriously 
overlapping and often lumped together. In the technical 
community, research generally refers to activities that produce 
new knowledge, while development refers to the use of existing 
knowledge to produce new systems, products or practices. Even 
these very general definitions are open to much interpretation 
and practice. An important distinction, however, is that 
research is usually targeted more broadly to longer term and 
must be provided a very broad and loose type of oversight, 
while development usually has very specific targets, has a 
shorter timeframe, and requires a project management type of 
oversight.
    Let me now outline two frameworks for discussing Federal 
activity in this area. The first separates IT from its usage. 
Very simply, it is often useful to differentiate between IT 
activity and IT-enabled activity. For example, a research 
project we are currently supporting at NSF, an assessment of 
voting technology and ballot design, seeks to provide an 
assessment of information technologies relative to on-line 
voting and ballot design. This is certainly IT research. It may 
lead to some IT development of, for example, better e-voting 
systems, but use of those systems would certainly be IT-enabled 
activity.
    The second framework that I would note is the one we use to 
report Federal activity in this area. The major research 
emphases of the NITRD effort are called program component 
areas, and those are spelled out in what we call the Blue Book, 
our annual supplement to the President's budgets.
    Let me now turn to the questions expressed in your letter 
of invitation. The first question was who is doing IT research 
and development? I believe, as Dr. Nelson has already 
indicated, at least 13 agencies or major subareas of larger 
agencies report work in the NITRD program that is self-
identified as research. Non-U.S. Government personnel perform 
the majority of that work, as Dr. Nelson has indicated. There 
is undoubtedly additional IT research supported by the 
government and of course a very large amount of development, as 
Ranking Member Clay's opening statement made note of.
    The second question was where are these investments being 
made. I think it is fair to say that there is some amount of 
investment in every State, in every research university and 
essentially every company capable of providing research service 
to the U.S. Government.
    Your third question is what is government gaining from 
these investments. In general, government is gaining directly 
from the technical base used by our military and for 
streamlined governmental operations and indirectly by fostering 
the continuing economic revolution that provides the 
innovation, productivity and economic vigor for our Nation as a 
whole.
    Your fourth question was why should government continue to 
make those investments. I can only add that as industry often 
and publicly stresses, it is because federally funded research 
is essential to the continued advancement of IT technology.
    Your final question, how much is being spent by the Federal 
Government? I believe that within the stated caveats, the 
cross-cuts listed in our annual Blue Book provide a good 
compilation of Federal research activity in this area.
    In conclusion, let me thank you for the opportunity to 
appear before you today. I would ask that my fuller written 
statement be entered into the record. I will be glad to respond 
to your questions.
    [The prepared statement of Dr. Freeman follows:]
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    Mr. Putnam. Thank you very much.
    Our next witness is Dr. Hratch Semerjian, who is serving as 
Acting Director of NIST. He has served as the Deputy Director 
of NIST since July 2003. In this position Dr. Semerjian is 
responsible for overall operation of the institute, including 
financial management, human resource management facilities and 
information technology systems, effectiveness of NIST technical 
programs and for interactions with international organizations.
    Dr. Semerjian received his Master's and Ph.D. Degrees in 
engineering from Brown in 1977. He joined the National Bureau 
of Standards, now known as NIST, where he served as director of 
the Chemical Science and Technology Laboratory from April 1992 
through July 2003. He has received countless awards and we 
welcome him to the subcommittee today.
    You are recognized for 5 minutes.
    Dr. Semerjian. Thank you, Chairman Putnam and Ranking 
Member Clay. Thank you for the opportunity to testify about 
NIST's contributions to Federal information technology research 
and development.
    The impacts of information technology on the United States 
and the world economy are certainly well known. NIST plays a 
critical role in building trust and confidence in information 
technologies and development of secure, reliable and 
interoperable IT systems. NIST's programs help to ensure that 
the U.S. industry maintains the competitive advantage vis-a-vis 
the rest of the world while ensuring that U.S. Government 
information technology assets remain secure.
    Twenty-first century science is being pushed by continuing 
progress in computing information and communication technology 
and pulled by the expanding complexity, scope and scale of 
today's technological challenges. Information technology is 
providing the potential for the research community to build new 
types of scientific and engineering knowledge and to pursue 
research in new ways and with increased efficacy. The key to 
these breakthroughs is achieving the necessary functionality, 
interoperability, usability, confidence and data protection 
within the IT systems that will lead the way.
    NIST is at the forefront of these developments. I'd like to 
give you just a few highlights from our information technology 
program which will give you a flavor of the wide array of 
expertise that exists at NIST. For example, NIST ensures the 
security, confidentiality, integrity and availability of 
information by providing standards and guidelines, testing 
methodologies, and other Federal Information Processing 
Standards [FIPS], in compliance with legislation such as the 
Computer Security Act, the Federal Information Security 
Management Act and the Cyber Security Research and Development 
Act.
    NIST helps mitigate the cost of inadequate software 
testing, which is estimated to be around $60 billion, by 
developing test methodologies for software assurance and 
conformity to IT standards.
    NIST develops tests and measurement technology that keys 
the implementation, robust operation, and continuity of 
operations of the Nation's core networking infrastructure, 
especially to assure the robustness of the systems under 
various failure and recovery scenarios.
    NIST enables efficient access, manipulation, and exchange 
of complex information through advances in human language 
technology that enhances context extraction, question answering 
and speech-to-text capabilities.
    And NIST provides analytical, statistical and computational 
tools for solving scientific and engineering problems. Some of 
these tools, for example, are currently being used in the 
analysis of the World Trade Center collapse. We are also 
collaborating with the semiconductor industry to create a Web-
based electronic handbook of statistical methods.
    Through these efforts, NIST has developed world class 
competencies in cyber security, software, networks information 
access, mathematics, statistics and interoperability. This 
bundle of competencies, combined with Nobel prize winning 
expertise in the physical sciences, places NIST in a unique 
position to create an enormous impact on the economy and 
innovation enterprise in the United States. It is precisely 
this unique capability that attracts industry and other Federal 
agencies to collaborate with NIST. And let me highlight some of 
these specific efforts where NIST's expertise is being put to 
direct use.
    For example, NIST works with industry to ensure the 
interoperability of technology specifications. Interoperability 
is essential to productivity and competitiveness of many 
industries because efficient design and manufacturing require 
the coordination of many different participants and processes 
that rely on a digital representation of the product. To 
mitigate the billion dollar annual cost just to the automotive 
supply chain, NIST has initiated the NIST manufacturing 
business-to-business operability test beds, for example.
    NIST assists government and industry in protection of the 
U.S. borders through the development of biometrics evaluation 
systems, standards and research. Two recent laws recognize this 
expertise and provide specific requirements for NIST, the U.S. 
Patriot Act and the Enhanced Border Security and Visa Reform 
Act.
    NIST enhances trust and confidence in voting systems. The 
Help America Vote Act provides NIST with mandates in the areas 
of security, hardware and software interoperability and human 
factors issues. Under HAVA, NIST just recently released a study 
on human factors which will be used to improve the performance 
and reliability of voting machines.
    And looking more into the future, NIST makes revolutionary 
advances in quantum communications and computing. This is 
really important for the future of the country, because quantum 
communications offers the promise of perfectly protected 
messages, while quantum computing offers the promise of 
dramatically increased computing power.
    NIST also utilizes information technology for knowledge 
management. I think we have a knowledge-based economy, and both 
the creation and dissemination of knowledge is a very important 
part of what we do at NIST.
    NIST works with other Federal agencies, academia and 
industry to develop and promote openness and interoperability 
of information technology. We work with other agencies to 
provide expertise in our own unique areas of research to DOD, 
DHS, HHS, DOJ and others. We also participate in the 
Interagency Working Group on Information Technology R&D, and we 
also cooperate with industry on integrating information-based 
manufacturing systems and development of the measurement and 
standards infrastructure needed for the application of 
intelligence systems in manufacturing, defense and homeland 
security.
    In fiscal year 2004, the NIST Information Technology 
Laboratory received about $48 million in appropriated funds. In 
addition, ITL received about $17 million from other agencies on 
a reimbursable basis. These are the words with M, not the B. 
The President's 2005 budget request has an increase of $7 
million for the NIST IT budget.
    In conclusion, NIST takes its roles in maintaining the 
vitality of the U.S. information technology industry seriously 
in providing unique expertise to the rest of the government and 
in sharing with industry, government and universities the basic 
science and technology that comes from its measurement and 
standards research. These brief examples of our work and 
accomplishments illustrate NIST's commitment to these roles. 
They also demonstrate the base upon which NIST continues to 
build.
    This concludes my prepared remarks. Thank you.
    [The prepared statement of Dr. Semerjian follows:]
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    Mr. Putnam. Thank you very much.
    Our final witness for this panel is Dr. Carl Edward Oliver. 
Dr. Oliver is the Associate Director of the Office of Advanced 
Computing Research for the Office of Advanced Science at the 
Department of Energy. He is responsible for basic research and 
applied mathematics, computer science and networking needs in 
the Office of Science. His duties include management of the 
Small Business Innovative Research Program.
    Dr. Oliver came to DOE under the Intergovernmental 
Personnel Act from Sandia National Laboratories. Prior to that 
he was the associate laboratory director for computing robotics 
and education at Oak Ridge National Lab from 1995 to 2000. 
After receiving his Ph.D. in mathematics in 1969 as a NASA 
fellow from the University of Alabama, he held research and 
management positions at the Air Force Weapons Lab, the Air 
Force Office of Scientific Research and DOE.
    He has also held teaching positions at six universities, 
been active on a national and international level organizing 
professional society meetings for numerous academic societies 
and has served on several university and Federal advisory 
committees and others under the auspices of the OSTP and the 
National Science Foundation.
    Welcome to the subcommittee. You are recognized for 5 
minutes.
    Dr. Oliver. Mr. Chairman, I too commend you for holding 
this hearing and I appreciate the opportunity to testify on 
behalf of the Department of Energy's Office of Science on a 
matter of importance to the Nation; namely, information 
technology research.
    Dr. David Nelson and Dr. Freeman have given you some 
overview of the Federal IT R&D activities. I'll concentrate on 
those areas of the portfolio where the Office of Science 
focuses its efforts: High performance computing, large scale 
networks and software that enables scientists to use these 
resources as tools for scientific discovery.
    Ever since the inception as part of the Atomic Energy 
Commission immediately following World War II, the Office of 
Science has blended cutting edge research and innovative 
problem solving to keep the United States at the forefront of 
scientific discovery. Since the 1940's, the Office of Science 
supported the work of more than 40 Nobel prize winners. 
Research supported by the office has made major contributions 
to the United States in research areas such as magnetic 
resonance imaging, medical isotopes, composite materials used 
in motor vehicles and x-ray diagnostic of computer chips and 
other high tech materials.
    Other research investments have led to such innovations as 
the Nobel prize winning discovery of new forms of carbon, 
noninvasive detection of cancers and other diseases, improved 
computer models for understanding global climate change and new 
insights into the fundamental nature of matter and energy.
    High end computing has become an indispensable tool for 
researchers across the Office of Science. Large multi-
disciplinary teams of researchers that combine the expertise of 
physicists, chemists or biologists with the expertise of 
computer scientists and mathematicians are working on the next 
generation of computational science tools that will enable the 
discovery and design or advance of materials for the 
development of catalysts that dramatically reduce the energy 
costs and emissions and understanding of the dynamics of 
combustion systems. Each of these examples and many more will 
have a significant effect on the missions of the Department of 
Energy and then the missions of other U.S. Government agencies.
    High performance networks play a critical role as well 
because they make it possible to overcome the geographical 
distances that often hinder science by making all the 
scientific resources readily available to scientists, 
regardless of their physical location. In this area, we work in 
close coordination with the National Science Foundation and 
university consortia such as Internet II to ensure that 
scientists at universities can seamlessly access unique DOE 
facilities and their scientific partners in DOE laboratories.
    To develop these tools we also work closely with other 
agencies. A significant part of the coordination has been 
described by Dr. Nelson already. In high end computing we 
cochaired the High End Computing Revitalization Task Force that 
was put together. This task force identified our Nation's 
critical needs in a report released in May, and they proposed a 
game plan to improve U.S. computing capabilities.
    The Office of Science and other Federal agencies are 
working to implement the recommendations of the task force 
report and to develop the next generation of supercomputing 
capability as well as networks needed to allow the broadest 
possible access to new systems.
    On May the 12th of this year, Secretary Spencer Abraham 
announced that the Department of Energy will provide $25 
million in this fiscal year to a team led by Oak Ridge National 
Laboratory to begin to build a new supercomputer for scientific 
research. This is an important step toward achieving our 
leadership goals. When complete, researchers will gain the 
ability to understand the natural world with the precision that 
could only be imagined a few years ago.
    It's clear that working with our computing industry, we can 
build these tools. The administration has developed a clear 
path forward for revitalizing high end computing, and with 
vital support from the Congress and administration I am 
confident we will succeed.
    Once again, thank you for the opportunity to testify before 
the committee on this important matter.
    [The prepared statement of Dr. Oliver follows:]
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    Mr. Putnam. Thank you very much, Dr. Oliver. I want to 
thank all of you for your opening statements. Your full 
statement is to be included in the record, and we will begin 
with questioning.
    Among these two dozen or so agencies that are coordinating 
or, excuse me, are engaged in Federal research, is there some 
collaboration across those agencies to pursue an overall 
strategic framework for research? Do they communicate with one 
another to avoid duplication or to buildupon the successes that 
are being found? Does the left hand know what the right hand is 
doing?
    Dr. Freeman, you're nodding. We'll let you answer first.
    Dr. Freeman. That's fine. Thank you sir, and I think that 
my cochair of the NITRD working group, David Nelson, will add 
to whatever I may have to say.
    I think the answer to your question is a very definite yes 
in terms of coordination, in terms of knowing what each other 
is doing. In some cases that results in joint solicitations. 
For example, in the high performance computing area, we are 
currently coordinating, or I should say collaborating with 
DARPA for a jointly funded research program. We have several 
others in other areas already in place with DARPA. We are 
putting one in place with NIH, so there are a number of 
examples of that sort.
    The Interagency Working Group as a whole meets every 3 
months at which representatives from all 13 of those agencies 
are present to review budgets, to review strategic directions 
and, in general, to coordinate. There are then the program 
coordination areas that both Dr. Nelson and I mentioned. Those 
smaller, more narrowly defined groups; for example, in the area 
of human computer interface or in the area of high confidence 
or secure systems, those smaller groups of program directors 
and program managers typically meet on a monthly basis, in some 
cases even on a weekly basis, because many of the primary 
agencies are located physically adjacent to each other.
    So there is a high degree of communication and 
collaboration there.
    Mr. Putnam. Dr. Nelson.
    Dr. Nelson. I agree with the comments of Dr. Freeman and 
would just add a couple of things. First, I refer to the 
Interagency Working Group, which Dr. Freeman and I cochair, as 
our board of directors. It sets the general directions and 
identifies special topics. About a year ago, Peter and I 
commissioned a study of whether the program components areas 
and the groups that implement them were properly constituted, 
and the answer that came back from them, and the Interagency 
Working Group has blessed it, is that in general they are, but 
in particular we need to focus more on security. And so we have 
started as a cross-cutting topic looking at how security 
aspects of all of our work need to be better done. It's, as you 
know, an extremely difficult topic.
    The other thing that I would add is that there's always an 
open door to the involvement by additional agencies and 
additional programs in the work of the--and I will use the 
acronym here--the NITRD program. So for example, we have the 
Federal Aviation Administration, Food and Drug Administration 
as observers. They don't have much research, but they do want 
to use what the research program produces. And we also are 
discussing with the Department of Homeland Security its entry 
in the program. So the door is always open. Information 
Technology Research and Development has an awful lot of small 
pieces. And so as Peter has said, much of the detailed work is 
done putting those pieces together.
    I mentioned before an example of research needs 
assessments. That's usually the first step. That's one. Another 
example of research needs assessment is the document that Peter 
just referred to, which is the Federal Plan for High-End 
Computing, which involved about 60 Federal managers from 12 
agencies for about a year. After research needs assessments is 
research planning. Peter gave one example. There are many 
others.
    The agencies share reviewers: They coordinate the 
solicitations; and then they jointly review progress and, where 
necessary, make changes and of course then go through another 
cycle of research needs, research planning, research 
implementation, research review.
    Mr. Putnam. OK. Dr. Freeman, you said that they meet 
periodically to review strategic direction. Who sets the 
strategic objective, and could you summarize what the strategic 
objective is currently for Federal IT research and development.
    Dr. Freeman. I don't think that I or anyone is really 
capable of saying what the objective is. As Dr. Nelson just 
indicated, there is a fairly elaborate process of trying to 
understand the needs for future research. He mentioned some of 
those activities. Let me share another one with you that 
perhaps will illustrate the process and thereby how the overall 
objectives are ultimately set.
    Another activity that Dr. Nelson and I initiated, oh, 
probably a year and a half ago now, was an effort by the 
members of our working group to look at what are the major 
challenges, often called grand challenges, that would involve 
information technology, not on the research but at the usage 
end; for example, being able to seamlessly access the medical 
records of any citizen anywhere with appropriate privacy 
security, etc. It was put forth as a possible grand challenge, 
because we don't really know how to do that today. That working 
group, which worked for, oh, 6, 8 months, ultimately came back 
with a set of these grand challenges that, if achieved, would 
have great benefit for our society and for our economy. Taking 
those grand challenges, they then backed up and said, so what 
research should we be doing? So for example, security was 
something that was seen to be a critical component of 
essentially every one of those grand challenges.
    So, through this process, our members, the various 
agencies, and through other processes that are not a part of 
the interagency activity, because each agency has its own 
internal processes to bubble up these research needs, 
prioritization then of those research objectives will depend 
upon the individual agencies, upon their missions, and upon 
their judgments as to which of, as Dr. Nelson has indicated, 
the many, many objectives that one could name.
    So, in sum, what we wind up with is not a single strategic 
objective or even a coherent set of a small number. Obviously, 
we can boil those up to a high level and certainly security is 
a current high objective, I believe, of all of our members. 
High performance computing is another objective that is very 
important to many of the agencies. Ease of access to large data 
stores is a third objective. But I would not characterize those 
as forming a strategic plan in the same way that an individual 
company or an individual agency might have.
    Mr. Putnam. Dr. Oliver, a lot of attention has been paid to 
the fact that Japan now has the fastest supercomputer, the 
Earth simulator, which I believe has led the United States to 
reassess its high end computing R&D plans. Given where we now 
stand, are the existing Federal efforts appropriately targeted 
to deal with the challenge of positioning the United States as 
a leader in IT R&D, or are we losing our leadership position in 
this area?
    Dr. Oliver. I think that the formation of the High End 
Computing Revitalization Task Force last summer was the right 
step at the right time for us to articulate as a group of 
Federal agencies and departments how to address this problem. 
There were lots of meetings that were held and the report was 
written, and I think the implementation plan is pretty much in 
place or will be soon. So I think fully supporting that plan 
will lead us to a leadership position again. There is no doubt 
about it.
    Mr. Putnam. Mr. Clay.
    Mr. Clay. Thank you, Mr. Chairman. Dr. Nelson, according to 
the recent report on Federal R&D released by RAND, total R&D 
funding for colleges and universities grew from approximately 
$70 billion in fiscal year 1996 to $96 billion in fiscal year 
2004. Yet only $2.2 billion is dedicated specifically to IT 
research and development through the NITRD program.
    Can you tell us why it is such a small percentage of the 
total allocation, and have no concerns with cyber security and 
national defense caused your office to reevaluate its support 
for IT R&D funding?
    Dr. Nelson. Yes, Congressman Clay, the priorities for 
research, as for any other Federal program, go through many 
steps and have many masters. And so addressing a question like 
why IT R&D is only $2 billion is almost impossible. One could 
equally ask why is it as big as it is. And I think, as you 
pointed out, it has grown substantially in recognition of its 
importance.
    I would suggest though, and I think Dr. Freeman has also 
mentioned this, that much of other research has information 
technology components. The term that's used often is it's 
embedded in that research, and it is almost impossible to tease 
out how much of that other research is information technology. 
But we know there is a lot there. In other words, the amount of 
information technology research is higher than the numbers 
might suggest.
    The second thing that I would say is I believe the RAND 
study pointed out that much of that increase went to medical 
schools and was a direct result of the doubling of the National 
Institutes of Health budgets, and of course that has been a 
national and bipartisan priority. It is good to note that much 
of the improvement in health care research has come about from 
better usage of information technology, and bioinformatics is 
now a thriving field.
    So again it's hard to tease out, and the bottom line I can 
give you is that there probably isn't a direct answer. We can 
all hope that those good research ideas are funded and that 
they appropriately impact our economy and way of life.
    But the process for arriving at it is probably beyond that 
of any one person to comprehend.
    Mr. Clay. Then another question, Doctor. Tell me about, 
compare the 2004 budget for Federal IT R&D to 2005. It's been 
reduced by about $200 million, from $2.2 billion to $2.0. Can 
you tell us why the amount requested was reduced?
    Dr. Nelson. Yes. I would like, if I could, to answer that 
for the record. And I will tell you why. We have a total for 
2005, but because the--and I will use the term NITR&D, that's 
Networking and Information Technology R&D--program is what we 
call a crosscut, you can't get there by aggregating line items. 
And, therefore, it takes judgment and allocation to come up 
with either the total or with the subcomponents. We do not yet 
have the 2005 numbers for those subcomponents.
    And before I could address why that $200 million is 
approximately about 10 percent down, I would have to have a 
better idea of how it matches up with the program component 
areas that Dr. Freeman referred to, and therefore what the 
change is. I would be happy to respond for the record, but it 
may take a few weeks before we get back to you.
    Mr. Clay. That's fine. Thank you for that response.
    And Dr. Freeman, I am concerned that a large proportion of 
Federal R&D funds are being limited to the life sciences. Can 
you tell us if the IT needs of the medical and biological 
research communities are being met through the current formula 
for Federal R&D funding?
    Dr. Freeman. Congressman Clay, I'm afraid in the specifics, 
I am not competent to answer that question. Obviously, someone 
from NIH or the medical community should address it. I would 
note that through the interagency working group and our budget 
reviews, we are aware that NIH is spending large sums on 
information technology usage, more on the development and usage 
side of the ledger than on the underlying research. But I will 
have to defer to their judgment as to whether there is 
sufficient IT research being done in the country to support 
those medical efforts.
    Mr. Clay. OK. Then I guess asked another way. Can you cite 
for us what other Federal R&D needs would rival the need for 
life science research?
    Dr. Freeman. Well, certainly based on the demand through 
the proposal submission process at NSF, there is a very large 
unmet need for additional research. Let's take the cyber 
security area. My program director in this area is just in the 
process this week and next of making final decisions on 
something like 150 proposals that were submitted by a deadline 
a few weeks ago for funding specifically in the cyber security 
area. I have not seen the final results, but based on previous 
competitions, probably at least 30 to 35 percent, about a third 
of those proposals would be ranked by their scientific peers as 
worthy of funding, that is, scientifically valid. We will be 
lucky if we can fund 10 percent of those submitted proposals. 
So there is an overhang there of good ideas in the cyber 
security area that we are simply not going to be able to fund. 
I suspect that my colleague from NIST has a similar experience 
in that area.
    Mr. Clay. I will get to him. Thank you for your response. 
You know, you guys have long responses and long opening 
statements, and they give us a limited amount of time. But I 
appreciate your effort.
    Dr. Oliver, in what ways can the Office of Science 
collaborate with the private sector on R&D initiatives in order 
to find solutions to problems facing our Nation and the 
international community, such as environment and educational 
issues?
    Dr. Oliver. Well, we have had a long history of 
collaborating with the computing vendor industry in high-end 
computing and network and so forth. And, you know, we have 
cooperative research and development agreements with many of 
the individuals who have funding from us, especially in the DOE 
laboratories. And so that has tremendous benefit in many ways 
with the computing industry. And the wave goes out from there. 
We get in machines. We have often bought serial one of every 
high-end machine in the Department of Energy from the beginning 
of time. There are a few exceptions.
    So we get them when they are raw. They don't necessarily 
work. We invest in operating systems to help make this work. We 
do this in cooperation with other agencies, DARPA and 1-Ks or 
NSF in another. And so we help make a machine viable. We then 
put on applications software like a structural analysis code 
and make it work on the machine. That makes it attractive to 
the aerospace companies and so forth.
    So there is a dramatic effect like that where we work with 
industry, you know, to help in the economic sense. And, but we 
do it to serve our own needs. I mean, we have to make these 
machines work in order to meet the missions of the Office of 
Science to do science.
    Mr. Clay. Thank you. And, finally, Dr. Semerjian. Are there 
specific areas of IT R&D that the government is currently not 
pursuing but merit consideration in future strategic plans?
    Dr. Semerjian. Well, that is a very broad question. 
Probably some of my colleagues are better prepared to answer 
that. But just from our own point of view, the kind of things 
that we do at NIST, I think I agree with Dr. Freeman that cyber 
security issues I think really need to be addressed. Because in 
every application area that we look at, whether it's the 
medical records or whether it's communication issues and 
national security issues, cyber security continues to be at the 
top of the list of issues, which is clearly underfunded.
    And I think we are very pleased that the President's budget 
proposes to increase the NIST part of that. But that is only a 
drop in the bucket. I am sure there are many other security-
related issues in other agencies which need to be addressed.
    Mr. Clay. Thank you for your response. I thank the panel 
for their indulgence. Thank you, Mr. Chairman.
    Mr. Putnam. Thank you, Mr. Clay. I just want to followup a 
bit on the coordination line of questioning. To what degree are 
the classified and unclassified research initiatives 
coordinated? If you take cyber security, for example, it's 
certainly broader than NIST and NSF. You have an alphabet soup 
of agencies within the intelligence community who are also 
doing work. Do they share some of their direction on research 
as well, or is that a world unto itself?
    Dr. Nelson.
    Dr. Nelson. I can speak to the relationship between the 
classified world and the unclassified. I personally have high 
security clearances, but the NITRD program is totally 
unclassified. Now, I believe there is reasonably good 
coordination between the classified side and the unclassified. 
And I will say how that occurs. Several of the agencies that 
participate in the NITRD program, in particular the National 
Security Agency, the National Nuclear Security Agency, and the 
Defense Advanced Research Projects Agency, bring their 
unclassified research to the table and work closely with 
agencies like NSF, NIST, DOE science, and so on to get the best 
bang for the buck out of that. Now, clearly, they take those 
results back into the classified side, and the NITRD program 
does not see those.
    I am aware that there are coordinating groups that deal 
with classified research, in particular, the Infosec Research 
Council. But I do not know whether that is broadly the case. I 
could mention another agency or two that interacts with us on 
an informal basis, the Central Intelligence Agency, and as I 
said earlier, we are talking seriously with the Department of 
Homeland Security about their joining the program. So, indeed, 
there is coordination. As it comes through the boundary between 
classified and unclassified, I'm less knowledgeable about what 
goes on behind the classification screen.
    Mr. Putnam. So Homeland Security is not currently a part of 
this NITRD program?
    Dr. Nelson. That's correct.
    Mr. Putnam. And what is it that needs to be decided to 
allow them to participate?
    Dr. Nelson. As you know, they have been forming up. And 
bringing all those subagencies together has been a monumental 
task. So the short answer is they are still working on their 
research agenda. They are still getting staffed up to carry out 
that research agenda. And I fully expect that as soon as they 
have people who are able to work--coordination takes time, it 
takes people--that they will join.
    Mr. Putnam. Well, I certainly expect them to get ramped up 
and be a part of it as soon as possible. They are an important 
piece, and they are a relatively new agency, but they are no 
longer a new agency and that excuse only carries you so long.
    Dr. Nelson. Yes, sir.
    Dr. Semerjian. If I could add on the classified versus 
unclassified issue. We do have a close working relationship 
with NSA. It is formally recognized that NIST provides the 
standards for the unclassified world, so to speak, and NSA for 
the classified. And we do work closely with them, since some of 
the technologies are utilized on both sides of the fence. So at 
least in terms of standard issues, cyber security-related 
standards, we have a very good working relationship with NSA.
    Mr. Putnam. Good. I want to give all of you the 
opportunity, because we were cut short on the opening 
statements, but we have another panel that we need to move to. 
I want to give any or all of you, if you have something that 
you wish to add to this conversation, something you wish you 
had been asked, now is the time. So we will begin with Dr. 
Oliver, work backward, and then we will seat the second panel. 
Dr. Oliver, anything to add?
    Dr. Oliver. Nothing to add.
    Dr. Semerjian. (Shaking head.)
    Mr. Putnam. Dr. Freeman.
    Dr. Freeman. A former professor always has another word. 
One topic we have not discussed today is the issue of 
education. That is one that, of course, NSF has a key 
responsibility in. And I would note that it is also a key 
element in both the research and certainly the development 
aspects of information technology, to say nothing of the 
utilization of it. I think that your opening statement, 
Congressman Clay's opening statement very aptly recognize the 
importance of information technology in essentially every 
element of our life today. And I would only add that we must 
keep in mind that educating all of our citizens at all levels 
of the work force, all the way down to kindergartners, in the 
usage of that technology is a key challenge that we need to 
keep in sight.
    Mr. Putnam. Let me followup on that and ask you, as someone 
who has come out of the academic world. Many of us are familiar 
with and very concerned about the decline in math and science 
skills among America's young people, the number of degrees 
being awarded to Americans in a number of these sensitive 
fields. I am not asking you for a silver bullet, but what are 
the steps that we can begin to take to turn that around and 
produce more math and science graduates?
    Dr. Freeman. I'm glad you didn't ask for the silver bullet, 
because I certainly don't have it and I'm not sure that I have 
all of the steps. But it is something, and the reason I bring 
it up here is it is a topic that I believe we must first and 
foremost always keep in mind. So it is important, of course, to 
look at funding levels at the substance of the research, but we 
must be mindful that we have to have the educated people to 
carry out that research, for example. So I think the attention 
of committees such as yours to the educational issues, the 
attention of all of us as citizens is certainly a first and a 
very necessary step to take.
    Mr. Putnam. Dr. Oliver, I believe in some of your 
responsibilities at the Department of Energy, do you have a 
hard time filling slots in the Office of Science? Do you have a 
hard time recruiting good people who want to work for the 
government doing this type of research?
    Dr. Oliver. You have done your homework. Yes, it is, in 
many areas, very difficult to get program managers to come and 
work in D.C., though I tout the city as the greatest place to 
live in the country in opportunities and everything. I mean, I 
think we have a terrific, you know, organization. And the jobs 
are truly exciting. And I find that it's just getting more and 
more difficult in our area and I don't know why.
    Maybe industry salaries are high, academic salaries are 
very high for people in computer science, applied math, that 
know about high-end computing, in tremendous demand, and I 
think maybe the pool is a little small. I mean, it's the supply 
and-demand situation. Anyway, it's very difficult for us to get 
people in the Office of Science. And we have a very important 
challenge facing us because I think we are an aging group, not 
just in information technology, but throughout the program 
management staff. And it's something we are aware of and that 
we are trying to address, and we are looking at all of the 
things that you can do, knobs you can turn. But it is indeed a 
challenge. So we have a lot of people with a lot of dual jobs, 
dual-hatted, but they rise to the occasion.
    Mr. Putnam. Thank you.
    Dr. Nelson, final comment?
    Dr. Nelson. Yes. Just one footnote in the planning and 
management area. We can always do a better job of strategic 
planning, no question of that. But we have to remember that in 
research, it's often the least planned and the least unexpected 
that yields the biggest dividends. Who would have thought that 
the high performance computing program would produce the Mosaic 
browser, and yet it was the NSF program at the University of 
Illinois that did just that. Who would have thought that an 
early program to link academic computers would have produced 
the Internet? But it did just that. And so in research we 
always look for the revolutionary change, the things that 
really improve the economy in the country. It's hard to plan 
those.
    And, as I mentioned in my testimony, management of those 
activities has to be very deft and sensitive. It's very easy to 
stamp out the revolutionary and it's very hard to encourage it.
    Mr. Putnam. Thank you very much. And I want to thank the 
entire panel. And, with that, the subcommittee will stand in 
recess while we arrange for panel two. And if you would be 
seated as soon as possible. Thank you, gentlemen, very much for 
your contributions to this hearing.
    If the second panel could please take their seats, we will 
begin. The subcommittee will reconvene. And if you would please 
rise, and anyone accompanying you who will assist you in 
answering the questions please rise for the administration of 
the oath.
    [Witnesses sworn.]
    Mr. Putnam. Note for the record that all of our witnesses 
responded in the affirmative. And we will move to the 
testimony. You will note the lights on your table. Green light 
means talk away. Yellow light means bring it in for a landing. 
Red light means bring it to a close.
    Our first witness is Dr. Donna Fossum. Dr. Fossum is a 
senior scientist and legal policy analyst in the RAND Resource 
Management Department, and is program manager of the RaDiUS 
Project. Prior to joining RAND, Dr. Fossum served as the legal 
counsel and technology specialist of the Committee of 
Government Operations here in the House of Representatives. Dr. 
Fossum has also served as the deputy associate administrator of 
the Office of Federal Procurement Policy in OMB, where she 
devoted much of her time to advising the administrator for 
Federal procurement policy on matters involving the defense 
industrial base. Most recently, she served as the senior 
adviser for science resources development at NSF.
    Dr. Fossum's work for the institute has centered on 
developing a comprehensive data base of the R&D activities 
sponsored by the Federal Government known as RaDiUS, to 
facilitate the management and content assessment of the Federal 
R&D portfolio. Much of her time is also devoted to working with 
OSTP and other Federal agencies as well as numerous nonFederal 
entities to identify and evaluate Federal activities in every 
conceivable field of R&D. Welcome to the subcommittee. You are 
recognized for 5 minutes.

   STATEMENTS OF DONNA FOSSUM, MANAGER, RADIUS PROJECT, RAND 
   CORP.; EDWARD LAZOWSKA, CO-CHAIR, PRESIDENT'S INFORMATION 
TECHNOLOGY ADVISORY COMMITTEE AND CHAIR, DEPARTMENT OF COMPUTER 
  SCIENCE AND ENGINEERING, UNIVERSITY OF WASHINGTON; WILLIAM 
  SCHERLIS, PROFESSOR, SCHOOL OF COMPUTER SCIENCE AT CARNEGIE 
   MELLON; AND STEPHEN SQUIRES, CHIEF SCIENCE OFFICER, VICE 
                   PRESIDENT, HEWLETT-PACKARD

    Dr. Fossum. Thank you. Thank you very much. I have 
submitted a long statement for the record, so I will make it 
very short and summarize it. First I want to express my sincere 
appreciation for the hearing today, because this is a topic 
that often gets overlooked and, yet it is at the heart of 
everybody's life and becoming more so.
    Let me explain a little bit about the RaDiUS program and 
why it even came to be. In 1992, we were supporting the work of 
the White House in science and technology, and discovered that 
the data that everybody wanted or needed to find out what was 
going on in the world of Federal R&D and on various topics, we 
didn't have at the right level of granularity. It was at the 
program level, which wasn't adequate to answer their questions. 
For instance, they wanted to know what was going on in 
electronics, preventing violence in youth, automotive-related 
technologies, global positioning, aviation safety, etc.
    And this is where RaDiUS was born. RaDiUS systemically 
tracks all the R&D dollars that are identified by Federal 
agencies as being R&D and tracks them through the layers of the 
bureaucracy down to where they are actually spent--where I say 
``the rubber hits the road.'' And this is where the R&D is 
actually conducted. Courtesy of the RaDiUS data system, we now 
have a capability that is used extensively by many of the 
agencies in the Federal Government many Federal contractors, 
universities, and others all over the world to learn what R&D 
is being supported by the USG. Actually we have discovered 
there is very little duplication of R&D in the Federal 
Government, but there are many, many opportunities where 
leveraging of Federal R&D dollars is not happening.
    Agencies in the same red area don't even know it, but 
through RaDiUS, they can find out they are working in the same 
field and can leverage their dollars more effectively.
    RaDiUS, in 1998, was declared a ``best practice'' of the 
U.S. Government by the General Accounting Office. Courtesy of 
RaDiUS, RAND has been able to produce two reports. ``Discovery 
& Innovation'' has been called a chest crusher by one of our 
colleagues. What it provides is the first compendium ever of 
all the Federal R&D activities by State and city in the 
country. Where is it happening and what are they doing? This 
was done in 2000. It's time to be updated but a whole lot of it 
has not changed all that much. Where it's happening has not 
changed.
    I will leave a copy of it with you. And already today this 
report that came out a couple of months ago has been cited, 
``Vital Assets.'' It contains the first really accurate 
assessment of where all the Federal dollars are going to 
universities around the country. This kind of capability has 
been developed, courtesy of RaDiUS.
    But that's not what the topic of today's hearing is. You 
have gone through a wonderful list of questions to which we 
would all like the answers, but the one question that has been 
hinted at briefly by some of the people here that I want to 
focus on, which is a pivotal question in this area, is ``What 
is IT R&D?''--because IT itself has evolved so tremendously in 
the last 30 to 40 years, and the R&D associated with it has 
evolved right with it. For instance, initially IT was just 
physical components. We were building hardware. We were looking 
at the mathematical equations that could be used for pulling 
data together and manipulating it. At the beginning, that was 
IT R&D--physical components. And there's still a lot of that 
R&D work going on. As it evolved over time, IT R&D got into new 
applications and the new infrastructures. This is where you 
started spawning software and other applications like data 
bases. Once you put it together with infrastructure, 
applications, design, and development, what you have are all 
kinds of ramifications and potentials that had never been 
thought of in the very early days.
    So what I've provided in my written testimony is a template 
of essentially four definitions of IT R&D. One is very narrow, 
which is physical components. And another is quite broad, as it 
includes information technology functionalities, information 
technology applications and infrastructure, and the 
capabilities enabled by information technology. And since we 
are the data people, we wanted to give you some hard numbers to 
grab on to. So what is the Federal Government spending in IT 
R&D?
    If you take a narrow definition of IT R&D as physical 
components, and run it through the RaDiUS data system, we come 
up with the fact that there was about $1.5 billion of IT R&D. 
And this is a very conservative estimate. This is for just the 
physical components. If you broaden the definition to include 
everything, all four aspects, again, very conservatively, it's 
over $11 billion. That's about 12 percent of the Federal R&D 
budget. By the way, we are only talking about the ``Conduct of 
R&D'' when we talk about this information. Keep in mind that 
one of the biggest sources of confusion when we talk about R&D 
numbers in the Federal Government is often they include ``R&D 
facilities'' as well as ``R&D equipment.'' That doesn't get you 
the ``conduct of R&D.'' So in RaDiUS we only focus on the 
actual conduct of R&D work. That's what these numbers are.
    So you have a narrow definition and a broad one.
    What we cannot tell you is whether this is valuable 
research. We can tell you what it is and if it is meeting 
objectives of the Federal agencies. We can give you information 
on it. We can tell you what's going on. Let me give you a hint 
about some of this. Keep in mind, the major agency doing R&D in 
IT is DOD by far. In the narrow definition, the No. 2 agency is 
DOE. In the broad definition, it's HHS. You have all kinds of 
players here. NASA is a major player. You have NSF, and the 
Department of Agriculture. Every part of the Federal R&D 
community is working somehow in IT-related activities.
    Let me give you a little idea of who is doing what.
    Mr. Putnam. If you would, if you could summarize it. We 
have a vote at 3:15, and I want to get through testimony before 
they ring the bells.
    Dr. Fossum. OK. You've got it. I will just submit this to 
the record. But let's suffice it to say that people are working 
at DOD on everything from dealing with strike aircraft to 
virtual battlefields. At HHS, they are doing R&D on wireless 
EKG chips. They are doing all kinds of R&D all over the 
government dealing with IT. And we are here as the tool that 
can tell you what's going on where and help to better 
coordinate it. Thank you so much.
    [The prepared statement of Dr. Fossum follows:]
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    Mr. Putnam. Thank you very much.
    Our next witness is Dr. Edward Lazowska. Dr. Lazowska is 
professor and Chair of the Department of Computer Science and 
engineering at the University of Washington. He received his 
Ph.D. from the University of Toronto in 1977. He has been at 
the University of Washington since that time. His research 
concerns the design and analysis of distributed and parallel 
computer systems. He is a member of the NSF, CISE advisory 
committee, Chair of the Computing Research Association, and 
member of DARPA ISAT, and a member of the technical advisory 
board for Microsoft research.
    He is a member of the NRC's computer, science, and telecom 
board, and served on the CSTB committee that produced evolving 
the high performance computing and communications initiative to 
support the Nation's information infrastructure. He is a member 
of the National Academy of Engineering and a fellow of the ACM 
and of the high Triple E. He is a leader in the Learning 
Federation, a group that is concerned with using information 
technology to improve learning at the college level. Welcome to 
the subcommittee. You are recognized for 5 minutes. I would ask 
all of you to please hold tight on the 5, because there will be 
a vote at 3:15. Thank you.
    Dr. Lazowska. Thank you very much, Mr. Putnam, and the 
other members of your subcommittee. It is a pleasure to be here 
to testify today.
    As you said in your introductory remarks, much of the gains 
in productivity in the U.S. economy over the past decade, the 
really unprecedented gains throughout the 1990's, have been 
shown to be due to efficiencies produced through information 
technology. And IT and its advances are driving advances in all 
fields of science and engineering. So what your subcommittee is 
asking is, how does that happen? And the abstract answer is 
it's a complex ecosystem that involves companies and 
universities and the Federal Government. It's been working for 
50 years. The United States is the world leader in innovation 
in information technology today because of some formula that 
none of us can quite get our hands around but that 
fundamentally seems to work. So it has been a 50-year story of 
success.
    Every aspect of IT that we rely on today, every billion 
dollar subindustry, traces part of its origins to the federally 
funded university-based research program. You have a two-page 
handout of my remarks today. And on the second page is a little 
eye testing graph, which I won't try to describe to you now, 
but this is from a National Academy study that Dr. Nelson 
referred to. And what it shows is two dozen different billion 
dollar subcategories of the IT industry. And for each one, it 
shows the complimentary roles of university research funded by 
the Federal Government, industrial R&D, and product 
development, becoming a billion dollar industry.
    So the interplays are very complex, and there have been 
authoritative studies of this. But the key thing for you to 
understand is the role that the Federal research program has 
played in all of these technologies.
    I am fond of saying if you want to do E-commerce, you have 
to have a Internet, you've got to have Web browsers, you've got 
to have high performance data base systems, graphical user 
interfaces, public key cryptography for secure credit card 
transactions. All of those are results of the federally 
sponsored research program.
    In planning policy--and a point that Dr. Freeman made very 
clearly--it is important not to confuse industry R&D with 
research that's looking 5 or 10 or 15 years out. And here is 
just a concrete example. I'm on the technical advisory board 
for Microsoft Research. Microsoft advertises that it will spend 
$6.8 billion on R&D this year. OK. Of that $6.8 billion, only a 
couple hundred million is Microsoft Research, the organization 
that I advise.
    $6.6 billion is engineering the next release of Word and 
Excel and Power Point and Windows. This is really important. 
But that's done by taking ideas out of the R&D larder and 
putting them into products. It's engineering the next 
generation of the product.
    Now, it sounds like I'm castigating Microsoft, but I'm not. 
In fact, on the contrary, Microsoft invests about 5 percent of 
its R&D budget in activities looking out five or 10 or 15 
years. Dell, Oracle, Cisco invest essentially nothing looking 
more than one product cycle out. HP has a representative on 
this panel and HP does look more than one product cycle out in 
a style not unlike Microsoft. So does Intel. But many of the 
major IT companies don't look more than one product cycle out 
at all. And that's what defines our future, what makes sure 
that we are going to be a leader 5 and 10 and 15 years out.
    You heard from Dr. Freeman that another important 
characteristic of the Federal research program is that it 
produces people. A second graph on my handout is the Department 
of Commerce work force projections for the next 10 years for 
various fields of science and engineering. And what it shows is 
a huge work force gap in information technology compared to any 
other field of science and engineering.
    The Department of Commerce projects that more than three 
quarters of all the jobs that will have to be filled in all of 
science and engineering in the next 10 years are IT jobs.
    Recent increases in support for IT research have been 
important but have fallen far short of the levels recommended 
by the President's Information Technology Advisory Committee. 
Mr. Clay observed a disconnect in funding choices made by 
agencies. The third graph in my materials shows the increase in 
the government supported R&D budget over the past 30 years. And 
you see that the vast majority of that is increases in the 
National Institutes of Health. Every other field is essentially 
flatlined, although IT R&D has doubled over that period, you 
can't see the increase on a scale that includes health and 
human services.
    My response to your question asked of another witness about 
HHS IT R&D is that largely what they do is take innovations 
that DARPA and the National Science Foundation have funded and 
apply them to biomedical problems, as opposed to investing in 
fundamental IT research. There are exceptions, you will hear 
about the NIH bioinformatics program, but that's a few tens of 
millions of dollars new this year out of a $30-plus billion 
budget.
    So one other point that I would make is there are, as you 
heard, 13 or more Federal agencies investing in IT R&D. I think 
if you look at the history of innovation, it is NSF and DARPA, 
with work from Energy in high performance computing, that have 
driven the lion's share of the innovations.
    A couple more points and then I will conclude. The research 
community has concerns with the low level of funding for the 
NSF Computer and Information Science and Engineering 
directorate. That budget has gone up in recent years, but the 
research budget there is still only a bit more than $400 
million. We have concerns about----
    Mr. Putnam. If you could bring it in for a landing, please, 
sir.
    Dr. Lazowska. Sure. We have concerns about DHS's failure to 
invest in cyber security R&D. DHS began a year ago with a new 
$800 million research budget and proposed allocating $7 million 
of that to cyber security. That is simply a failure to 
understand the threat posed by cyber terrorism. And it's not 
that E-Bay goes down so you and I can't buy stuff; it is that 
computers are in the control loop of every element of the 
Nation's critical infrastructure. So if you want to attack the 
electric power grid, you go after the control systems. So it's 
a serious issue.
    Summary. The track record is clear, the Federal R&D 
investment has stimulated America's world leadership, our 
economic boom, our boom in all science and engineering. Current 
levels of Federal investment in IT R&D continue to be 
dangerously low. Thank you.
    [The prepared statement of Dr. Lazowska follows:]
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    Mr. Putnam. Thank you very much. You all are really opening 
up some fascinating pieces for us to explore on questioning.
    Our next witness is Dr. William L. Scherlis. Dr. Scherlis 
is a professor in the school of computer science at Carnegie 
Mellon and a member of CMU's International Software Research 
Institute. He is the founding director of CMU's Ph.D. program 
in software engineering. He is principle investigator of the 5-
year high dependability computing project with NASA in which 
CMU leads the collaboration with five universities to help NASA 
address long-term software dependability.
    His research relates to software assurance, software 
evolution, and technology to support software teams. He first 
joined the CMU faculty in 1980, after completing a Ph.D. in 
computer science at Stanford University and an A.B. at Harvard. 
He interrupted his career at CMU to serve at DARPA for 6 years, 
departing in 1993, as senior executive responsible for 
coordination of software research. While at DARPA, he had 
responsibility for research in strategy and computer security, 
high performance computing, information infrastructure, and 
other topics that we would be shot if we disclosed. He has 
served as program chair for a number of technical conferences 
including the ACM Foundations of Software Engineering 
Symposium, and he has more than 70 scientific publications. 
Welcome to the subcommittee. You are recognized.
    Dr. Scherlis. Thank you very much. Mr. Chairman and 
members, I appreciate the opportunity to appear today to 
discuss R&D for information technology. I'm going to make the 
case to you that strategic Federal IT R&D is now more important 
than before, and that we need proactive leadership to move it 
forward. We rely on IT systems pervasively in our economy for 
national security, for health care, and for the operations and 
safety of our infrastructure. The industry and research 
community have made rapid progress in the capability, 
performance, and interconnection of IT systems. But despite 
this rapid progress, software and IT generally remain immature 
as engineering disciplines. We continue to struggle with 
quality challenges related to cyber security and software 
dependability. We do not yet know how to achieve high levels of 
quality in critical systems without huge sacrifices in 
capability and flexibility and huge costs to test and inspect.
    For both cyber security and software dependability we are 
not in a good state. In cyber security, our stop gaps of 
firewalls, spam filters, intrusion detection and the like are 
not slowing the growth in exploits and vulnerabilities. This is 
a chart from the CERT that indicates the number of incidents 
that have been reported year over year. We are not succeeding 
in evaluation and validation. The Common Criteria ISO 15408, 
for example, does not yield guarantees regarding an absence of 
malicious code. In software dependability, we cannot in general 
make strong promises on the basis of testing and inspection. 
The coverage is not good enough. We supplement this by looking 
at how the code was developed and who did it. But these are 
poor proxies. We cannot, in general, fully evaluate software 
artifacts directly. Even when we can see every line of code, we 
cannot make promises about the systems we build.
    It is tempting to conclude that this bad state is intrinsic 
to IT; that things are the way they will be--for example, that 
because we get e-mail, we will also get huge volumes of spam. 
Or, that we are at a plateau--the pace of innovation is slowing 
down, the 1990's are over. Or, that the sheer mass of the 
deployed base will inhibit any fundamental change--can we 
switch the entire country over to drive on the left-hand side 
of the road?
    These conclusions are counter to the historical truth of IT 
for the past 40 years. There has been a constant technology 
revolution under the hood in operating systems, data bases, 
client server architectures, networking, languages, and so on. 
The research community, the successful IT companies and their 
customers all know how to handle this pace of change because 
they have been doing it for so long. In many areas, it is 
happening right now. But not in the most critical areas related 
to quality. We are almost complacent with our extreme 
vulnerability.
    However, there is reason to hope for the future. There are 
promising research results in the pipeline that bear on these 
major challenges. For example, more secure network protocols 
and services. Improved identity and authorization management. 
Techniques for the direct evaluation of software. Securable 
architectures for resilient designs.
    Given this, it's tempting to think that with the large R&D 
budgets the IT industry will take care of this and the 
government can step back. And this is wrong. Part of that 
historical truth of the past 40 years is that the Federal 
Government has consistently been an active player and leader in 
that process. And I'm going to give you four reasons why, and 
these reasons have to do with why industry does not in general 
look beyond more than one or two product cycles out.
    First, many of the most significant research results that 
bear on IT quality are nonappropriable. That means that their 
value diffuses rapidly across the market. It cannot be 
retained, it becomes a public good. Only government is going to 
sponsor this work. Bill Gates, for example, talks about a tool 
that is now used to reduce the frequency of blue screens. This 
tool is based on technologies that were developed a decade ago 
by my university colleagues and sponsored by NSF and DARPA: 
binary decision diagrams and model checking.
    Second, the early definition of standards has a 
particularly significant role in IT. This is the so-called 
prenormative work most vividly illustrated by the role of the 
IETF in the early days of the Internet and the role of the W3C 
more recently. The world of E-commerce is held together by 
standards such as TCP, IP, XML, HTTP, and so on.
    Third, government is a major IT consumer. It needs to 
collaborate with its entire simply chain, just like the auto 
industry. Long ago, DARPA exerted profound influence on 
networking and operating systems and processor design to create 
an amazingly scalable foundation for network centric warfare 
and modern command and control generally. It worked directly 
with the vendors, the innovators, and the researchers 
throughout the DOD supply chain.
    And, four, the main input to the IT food chain is 
university research and education. Without the people and 
expertise and the innovative attitude, we have nothing.
    There is another reason. IT innovation leadership is 
pivotal to the future of our country. I'm here from Pittsburgh. 
We can argue about the strategic necessity of leadership in 
steel or in consumer electronics, but IT innovation leadership 
is different. We cannot give it up. It's a driver of 
productivity, as Alan Greenspan has noted. It is a principal 
force multiplier in defense. And, perhaps most importantly, we 
still see no bounds on the potential for creating new value, 
new kinds of capability and cognitive powers. The frontier of 
innovation will continue to exist well beyond the frontier of 
commoditization. It will be our future for a long time.
    My conclusion is that we need proactive Federal R&D 
leadership. We need both basic science and mission motivated 
Federal R&D in order to retain our leadership position and to 
address the new challenges that we face. In the public private 
partnerships--the collaborations of industry, academia, and 
government--the government must be a full partner. I appreciate 
the opportunity to appear today.
    Mr. Putnam. Thank you very much. I appreciate it, Dr. 
Scherlis.
    [The prepared statement of Dr. Scherlis follows:]
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    Mr. Putnam. Dr. Squires, you are going to have a few 
moments to collect your thoughts to defend HP's honor with 
regard to your R&D budgeting. We are going to recess for a 
moment while we go have one vote. It should be a fairly brief 
recess, and we will return shortly. So everybody sit tight, 
enjoy your orange juice. And the subcommittee will stand in 
recess.
    [Recess.]
    Mr. Putnam. The subcommittee will reconvene. I apologize 
for the delay.
    Our final witness for this panel is Dr. Stephen Squires. 
Dr. Squires is the chief science officer and vice president at 
Hewlett-Packard. He is also a Special Government Employee 
Expert Consultant for the Department of Defense through the 
Defense Advanced Research Projects Agency [DARPA]. In that role 
he is a member of the Intelligence Science Board and also 
served on the Defense Science Task Force on Defense Roles and 
Missions for Homeland Security and other special working 
groups. Previously, he worked for NSA for 15 years on IT 
systems.
    We look forward to your testimony. You are recognized, Dr. 
Squires.
    Dr. Squires. Thank you for inviting me to testify. I 
consider it an honor and a privilege to be here to discuss 
these critical issues.
    I want to focus on one main issue which was in the letter 
that invited me, and that issue is how the investments serve to 
protect this Nation and position the United States as a leader 
in the information technology arena.
    My answer to this critical question is based upon my 
understanding of the history of IT, my own direct experience 
and expertise in the most advanced research and development 
application programs focused on the most challenging problems 
facing the Nation, and my own vision of the future.
    The best way I can think of starting is to reference a 
paper titled ``As We May Think'' by Vannevar Bush in July 1945. 
It was written in his role as Director of the Office of 
Scientific Research and Development, coordinating activities of 
some 6,000 leading American scientists in the application of 
science to warfare. You should actually take a look at this 
article. It presents an extraordinary vision filled with all 
kinds of interesting examples, including one example called the 
``memex,'' which is essentially the Internet with a web of 
linked objects.
    The history of information technology is dominated by 
fundamental devices from the invention of the transistor, the 
integrated circuit, and the microprocessor, along with many 
other devices for the past 50 years and an extraordinary 
collection of systems developed through multiple layers of 
modules, structures, and massive amounts of software to support 
a wide range of applications.
    Information technology has become increasingly pervasive. 
It is hard to imagine life without it. Our national defense, 
homeland security, depend on it, in addition to our critical 
infrastructure, the economy, and the future of science and 
technology.
    IT industry and its applications have become a 
multitrillion dollar sector of the global economy that is 
recognized as enabling a new global dynamic. Information 
technology as generally viewed today appears to be a commodity, 
but it is not. The larger IT companies claim to have 
multibillion dollar R&D programs, which they do. But it is also 
very important to understand the operating point and the time 
horizon of those programs.
    It is natural for many people familiar with normal 
technologies to believe that there has been more than enough 
U.S. investment in the future of information technology and 
enough is enough. Let me say now in the strongest possible 
terms that I believe that such a belief is fundamentally 
misguided and in my opinion dangerous.
    The entire field has been through multiple revolutions and 
extraordinary advances that have been made across a wide range 
of science and technology areas. But with all of these advances 
and all of this investment in the past 50 years, we are really 
only at the beginning of a much longer process.
    As the limits of what have become conventional integrated 
circuits are reached, new technologies with its revolutionary 
implications are emerging at the atomic scale in the form of 
nano-technologies. New nano-devices can be integrated into new 
kinds of things such as new kinds of nano-integrated circuits 
with extraordinary properties, and properties that go beyond 
just computing to include new kinds of storage, sensors, 
effectors, and new ways to act with the physical world, 
including biological.
    The advances in these new devices will enable new kinds of 
modules, new kinds of units of replication, and present new 
challenges, challenges which simply will not be overcome by 
conventional industrial R&D. These, the new kinds of systems 
which we can imagine happening and emerging over the next 50 
years, or even the next 10 or 20 years, will be far more 
dramatic than anything we have seen in the last 50.
    Let me just give you some examples of the role of 
information technology that go beyond normal market trends: The 
role of information technology in things like critical 
infrastructure of the country, in science and technology 
itself, in national defense, homeland security, trusted 
information sharing, protecting individual privacy, and the 
most important of all, protecting the future of civilization.
    Let me briefly sketch four alternative futures. I'm just 
going to call them red, orange, yellow, green in the context of 
an idealistic vision, blue.
    Red is essentially pre-Internet technology.
    Orange is essentially an attempt to extend the red to cope 
with the emerging Internet revolution.
    Yellow is essentially an attempt to apply commercial 
Internet technology to the challenges of the Internet.
    And green is essentially the development of fundamentally 
more advanced technology than commercial Internet technology 
for the purpose of achieving strategic advantage. Such systems 
have more advanced cybersecurity than the commercial Internet.
    And then all of this is set in the context of blue, which 
is an idealistic vision of the future which I call ``intrinsic 
trust'' and that is the essential distinguishing characteristic 
of the fundamental advance needed for the future of information 
systems themselves.
    The most challenging problems provide insight needed to 
establish the most effective advanced research agendas. The 
ideal of blue is essential to guide the advanced research 
agenda for green.
    Given its own market forces, the information technology 
system will simply be stuck on the yellow brick road. The 
insights needed to create effective advanced research agendas 
emerge from interdisciplinary interaction among science, 
business, homeland security and national defense. The 
interactions are more critical because the need for public-
private systems to interoperate over a wide range of modes are 
all dependent upon critical and pervasive interoperable 
information systems capable of trusted information sharing 
while protecting privacy.
    I believe it is essential that the U.S. Government continue 
to invest in advanced research and information technology 
focused on protecting this Nation and ensuring that the United 
States continues to be the world leader in information 
technology. The future leadership depends upon continuing 
advances in science and technology at a time when information 
technology itself is not only becoming critical and pervasive 
but itself going through its own reinvention process.
    Mr. Putnam. Does that conclude your remarks?
    Dr. Squires. Yes.
    Mr. Putnam. Thank you very much, and I apologize for making 
you wait.
    [The prepared statement of Dr. Squires follows:]
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    Mr. Putnam. We will begin with the questions; and I will 
begin with you, Dr. Squires.
    Given that there will always be a finite amount of money 
available for Federal research and development, are we 
prioritizing the use of that funding in the most efficient 
manner?
    Dr. Squires. I don't think efficiency is the way to think 
of it. If you try to optimize the systems so that there is 
minimum duplication and maximum efficiency, you are very likely 
to lose the most interesting and innovative system that the 
world will see. It is all right for the innovation process of 
the national R&D agenda to be slightly loose and informal. You 
always need the flexibility for a bright young mind to come up 
with a new idea without having to go through a long-drawn-out 
proposal process. Start soon.
    The other thing is I think that there's a general structure 
that I've found that is useful in trying to set research 
agendas and that is to focus on the fundamental technology 
trends, understand their fundamental limits, and when you begin 
to identify a limit, look as hard as you can for effective 
alternatives. If you take a look at every major advance in 
information technology, you discover that it is a result of 
that process.
    Mr. Putnam. As someone who transcends the public and 
private sector, is there adequate collaboration between the 
two?
    Dr. Squires. There is a lot of collaboration, but I don't 
think it's adequate, and I will give you the main barriers. I 
think that the mechanisms in place for setting agendas and for 
holding full and open competitions and for negotiating the 
actual agreements takes too long. It is way too burdensome and 
actually tends to be a disincentive to people and individuals 
and universities and companies, my own personal opinion, 
working in that way.
    The phrase that I sometimes use in discussions like this, 
and I say our adversaries do not have the advantage of our 
procurement system.
    Mr. Putnam. Dr. Fossum, do small startups and smaller 
universities with less well-established research relationships 
with the Federal Government, startup companies that have a 
great idea born in a garage, do they receive adequate 
attention, adequate opportunity to compete with the big, well-
established companies that are out there?
    Dr. Fossum. In theory, yes. Is it a level playing field on 
paper? Yes. But there's an awful lot of networking, 
connections, and experience that go into knowing how you 
actually successfully get a grant proposal through and how you 
actually go through a procurement and become a participating 
competitor, so to speak. I think it is a very large threshold 
for some to get across.
    Actually, when you mention universities, there are over 
1,800 4-year accredited colleges and universities and 
professional schools in this country, and only 80 of them 
receive 71 percent of the Federal funds for R&D. It shows you 
the concentration of these funds. It is an enormously 
concentrated world.
    Mr. Putnam. Dr. Lazowska, is that a concern, the 
concentration?
    Dr. Lazowska. I think equity and distribution and 
participation is always a concern. But I think the numbers that 
were just cited need to be interpreted in light of the fact 
that many of those 1,800 4-year schools do not purport to have 
a research program. They are purely educational institutions. 
So we need to make sure that research funds are equitably 
distributed to those best positioned to carry out the work. And 
I think Federal agencies do a reasonable job of that. There are 
also programs that ensure adequate research funding to States 
that don't have perhaps a full complement of research 
institutions.
    In terms of prioritization, I would just remark that the 
PITAC committee in 1999 did a fairly thorough analysis and 
concluded that the Federal investment in IT R&D, compared to 
other fields, was dangerously inadequate; and they proposed a 
ramp-up which has not been nearly met. In fact, as Mr. Clay 
pointed out, the NITRD funding will actually decrease in the 
proposed budget. So I think many Members of Congress are coming 
to the conclusion that the Federal R&D portfolio has become 
unbalanced. Perhaps that doesn't mean we're investing too much 
in some areas, but it means we're investing too little in 
others, and you have identified a number of them today.
    Mr. Putnam. The imbalance being toward the biological 
science and CDC, health?
    Dr. Lazowska. I would say the imbalance is against 
information technology. If you look at the role IT plays in 
national security, in advancing the sciences, in driving our 
economy, we are investing a relatively tiny amount of Federal 
money in creating the next generation of advances.
    Mr. Putnam. Dr. Scherlis, do you have anything would you 
like to add going to this?
    Dr. Scherlis. I guess I would.
    Your first question to Dr. Squires was concerning 
prioritization within the R&D portfolio, and I think it's worth 
clarifying a little bit from the outside my understanding of 
the NITRD process. It is not a top-down process. It involves a 
combination of vision and mission. The mission agencies who are 
collaborators within the NITRD process identify their needs and 
priorities on an agency mission basis. This is combined with 
input from the research community, who drive the process on the 
basis of their invention and imagination and desire to explore. 
It's the juxtaposition of those two things that really creates 
the innovative magic that several of my colleagues have spoken 
of earlier in this hearing.
    Mr. Putnam. Is the allocation of R&D skewed too heavily to 
defense and defense-related research? Dr. Scherlis?
    Dr. Scherlis. Actually, it's interesting, the history of IT 
in this country has a history that's really largely been driven 
by a combination of Defense and the National Science 
Foundation. It is a combination of those two organizations. And 
it has been interesting growing up in IT to see that IT 
researchers and scholars have adopted defense metaphors. They 
speak in terms of survivability and command and control. DOD 
has had a profound influence; and, as a consequence of that, 
the mission needs of defense have been very well met through 
the research community.
    This has worked well because of the very farsighted, broad 
attitude of the DOD basic science investors, those who invest 
6-1 and 6-2 funds in the R&D world. It's the supply chain 
management story. They work throughout the supply chain, not 
just with the prime contractors and the systems integrators but 
with the vendors and the innovators and the inventors who feed 
that supply chain. They do it in a way that provides value well 
beyond the defense mission. There is a leverage in that story. 
The leverage is that DOD is able to buy off-the-shelf 
components and systems that they can apply directly in their 
mission. We have pervasive applications, spreadsheets, word 
processors, operating systems; and these are increasingly 
incorporated as components into systems. They are pervasive not 
just in our offices and homes but also in our national 
infrastructure and critical national security systems. So what 
has happened is that the pervasive systems have become 
critical. This is an inevitable and positive outcome. It's the 
nature of IT that we have come to this point. It makes these 
problems, in some ways, much more significant and challenging.
    Mr. Putnam. Dr. Fossum.
    Dr. Fossum. I think one of the questions that you raise is 
about what is defense R&D. We don't really know how to divide 
R&D. R&D doesn't know a home agency or a discipline. It can go 
across all kinds of areas. Let me give you an example.
    I happened to be at the Army 1 day talking to a gentleman 
there whom I literally asked ``What is your major technology 
challenge?'' And he said they needed a ``miniature, long-life, 
anticorrosive fuel cell'' to put in every piece of equipment 
they deployed in the field. And we put in the term RaDiUS--
``fuel cell'' into RaDiUS and got hits in six or seven 
different agencies including NIH. We shortly were looking at an 
actual description of ``miniature, long-life, anticorrosive 
fuel cell'' research at NIH for the artificial heart. That is 
why it is very hard to talk in terms of ``health'' research 
versus ``defense'' research. R&D doesn't know boundaries like 
that. Discovery doesn't recognize those boundaries.
    Mr. Putnam. Dr. Squires.
    Dr. Squires. One thing I'd like to add to what Dr. Scherlis 
mentioned is the fact that throughout the history of advanced 
research in science and technology leading to advanced products 
there's a pattern that having people able to understand and 
focused on the hardest problems of the time with the resources 
and flexibility to solve those problems is what leads to great 
invention. You don't make great advances by looking at the easy 
problem. You don't make great advances by doing what everybody 
else is doing. You make great advances by going beyond what you 
normally can think of doing and trying to invest the future.
    It turns out that because of the nature of the American 
system, the American economy, the role of defense in the United 
States and around the world, the defense and national security 
system, the homeland security system of the country has among 
the most challenging problems for information technology and 
science. It's just a fact, and that is a tremendous source of 
insight and motivation, and the people who make the investments 
and set up the research agendas normally do it in such a way 
that the technologies are as much as possible dual use. Because 
it doesn't do you much good to have an advanced technology if 
you can't afford it. So it's a very subtle, complicated and 
important relationship between the public sector, the private 
sector, the civil agencies in the government, the National 
Security Agencies, and the government how that works in the 
community.
    Mr. Putnam. Clearly, it is an important role for defense to 
play in research; and it's allowed us to be on the cutting 
edge. Frankly, it is something to be very proud of. But it's 
just interesting to think about the breadth of research that 
occurs in the name of defense, whether it is an MRE in food 
preservation or it is training a dolphin to go seek out a mine 
and everything in between that leads us to things like the 
Internet, things like GPS that are now in every brand-new 
suburban sold and all of these other things.
    Dr. Scherlis.
    Dr. Scherlis. One of the reasons why it is important to 
focus on mission R&D is that the needs of Federal agencies 
often anticipate the market in terms of their demands for 
capability and quality. In areas where they follow the 
marketplace they should generally follow the marketplace with 
respect to acquisition as well. But in IT, the history has 
always been that many mission agencies, not just the DOD but 
the Department of Energy, NASA, other agencies, have needs 
that, frankly, go beyond the needs that are evident in the 
marketplace at any given moment. When they invest in a dual-use 
fashion, they get this tremendous impact from the investment 
because it creates an economic stimulus as well as a response 
to the agency needs. That actually pays off for the mission 
agencies. It's an important and sometimes essential payoff for 
those agencies.
    Dr. Lazowska. I'd just add one other fact to this, and that 
is the track record over many decades is that it takes about 15 
years from the invention of an idea to when it's exploited in a 
billion dollar industry. OK? So what that means in some sense 
there is no such thing as just-in-time research if you are a 
commercial enterprise. Companies cannot afford to be investing 
in innovation that is not going to pay off for 10 or 15 years. 
I'm a shareholder, and you are a shareholder, and that is not 
the way we make investment decisions.
    That speaks to the role of the Federal Government and the 
Federal agencies because the mission of the Federal agencies 
require these advanced technologies. They support the 
innovation which in many times makes its way into the private 
sector, but it is many years later, and that is why the Federal 
Government has such an important role.
    Dr. Scherlis. Forgive me for prolonging the discussion, but 
I have to add one more point. Mission agencies enjoy another 
advantage, which is that they can afford to be farsighted. They 
don't have to make a quarter-by-quarter ROI case for every 
research investment they make. They can anticipate their needs 
through a planning process, and they can respond to these needs 
through their R&D mechanisms. And that, combined with the fact 
that they don't need to explicitly appropriate the value that 
they create through that R&D investment, creates a tremendous 
synergy that allows them to be much more aggressive and to get 
more leverage for their funding.
    If you look at the level of DARPA funding over these many 
years as compared with R&D funding in any one of the major IT 
companies, it is relatively low. But DOD gets enormous impact 
for that investment because they are investing in a leveraged 
way. They are applying this supply chain management trick of 
investing where they see they can get the maximum impact for 
that investment in the long run.
    Mr. Putnam. Are we still the cutting-edge Nation for basic 
research?
    Dr. Lazowska. There have been many claims in recent years 
that we are losing that edge, and the concern of PITAC has been 
that we are losing that edge in information technology because 
the level of investment has not kept pace with the 
opportunities of the field and the increasing demands on the 
field. So I think there is reason for concern, but it's very 
difficult to measure.
    For example, there was something in the papers a few months 
ago talking about the number of physics publications in Europe 
and Japan versus North America. I think we have to expect that 
the rest of the world is going to start contributing at a level 
comparable to what we're contributing. I urge to you think 
about the areas in which this Nation cannot afford not to be 
the world leader, and I would assert that information 
technology is one of those areas. We cannot afford not to be 
the world leader in information technology, because it drives 
everything else. It drives every other field of science, every 
other field of engineering. It drives the economy. It drives 
defense and security. We can't afford to fail to be the world 
leader in this one field.
    Mr. Putnam. Give me another field that we can't afford not 
to be the world leader in.
    Dr. Lazowska. You will have to convene another panel, 
sorry.
    Mr. Putnam. If I had CDC, would they say we couldn't afford 
not to be the world leader in gnomics and biotechnology and----
    Dr. Lazowska. I firmly believe that 30 years ago I stumbled 
into the field that underpins all other fields, OK? So I firmly 
believe that this field is No. 1 in terms of the leverage that 
it offers.
    Dr. Scherlis is talking about leverage, and this is a field 
that offers enormous leverage in all other fields. You can't do 
advances in the biomedical sciences these days or in health 
care delivery without advances in information technology. You 
know, astronomy is digital imaging and data mining of the 
images.
    Mr. Putnam. You are not supposed to say data mining 
anymore. Ask these DARPA guys.
    Dr. Squires.
    Dr. Squires. Don't ask me that question.
    I think next on my list is, obviously, nano-technology, 
because of its fundamental implications. But simply investing 
in nano-technology without the context of its transforming 
effect on all of information technology and all other science 
would be a mistake. As I said in my testimony, as extraordinary 
as the advances have been in the last 50 years, they were 
enabled by a relatively small number of fundamental device 
inventions and a massive number of systems structures and a 
massive number of software technologies; and what we have 
today, as wonderful as it is from my sort of perspective of the 
future, is a really very small scale prototype of what it could 
really be 50 years from now.
    Mr. Putnam. In the green world or the blue world?
    Dr. Squires. Yes, the blue curve. My blue sky vision says 
we need to be in this world of the green, and we need to get 
off the yellow brick road. The rest of the world has seen what 
the U.S. process of invention and innovation has done. We need 
to get on the new curve. Otherwise, what is the risk of having 
some other part of the global community decide to get on the 
green curve?
    Mr. Putnam. It is a tremendous risk. But I mean, in 1985, 
we were all being told to go on to speak Japanese and that the 
Japanese were buying up the whole Nation and they owned the 
motion picture studios. And because they owned the motion 
picture studios, it was the end of America as we knew it.
    We go through these periods, and I am not in any way 
arguing with a distinguished group like yourself that it is not 
important for us to continue to be the world leader in IT. I am 
just trying to play devil's advocate here.
    Dr. Scherlis. I made a point in my testimony about the 
necessity of IT innovation and leadership as compared with 
other engineering disciplines. The issue is where, globally, is 
the focus of innovation and how important is it to have that 
focus of innovation. The reason that IT is interesting, as 
compared with other building materials--we can think of 
software as a kind of building material--is that other building 
materials can only scale up so much. You can only build a 
building that is so tall before various laws of physics start 
to impede our ability to build it taller. With software, we 
don't see any such natural limits.
    The Windows operating system I believe is now 50 million 
lines of code. Who contemplated 50 million lines of code even 
20 years ago? Impossible. And there is no reason why we can't 
go from 50 million to 50 billion and to create systems of 
tremendous cognitive power, for example, that can translate 
languages or be autonomous robots or cars that can drive 
themselves. There are many such visions.
    My point is that these are no physical limits in the world 
of IT that impede us from addressing those aggressive visions 
directly. And in fact, as Steve Squires just said, let's focus 
on the hardest problems. What's interesting, in fact, is that 
partly is what DARPA is doing right now. They are focusing on 
the hard problems of cognition and how to build smart systems 
that can learn. That is a very good topic.
    But we also need to be focusing on the bread and butter 
issues of how can we make promises about the systems that we 
build, how can we make dependable systems and secure systems? 
These are hard problems, and these are the impediments to 
scaling up.
    Mr. Putnam. You said earlier there are absolutely no bounds 
for innovation to IT.
    Dr. Scherlis. No physical bounds. There are only 
intellectual bounds.
    Mr. Putnam. Does anyone disagree with that? Anyone wish to 
add to that?
    So how do you jump off the yellow brick road, Dr. Squires? 
Is it, as Dr. Freeman said, education, turning out more 
engineering and computer scientists and graduate degrees that 
are home grown? What is the trick to maintaining our leadership 
role in IT?
    Dr. Squires. I think it is important to have an effective 
framework for thinking about these future worlds that go beyond 
just the nano-devices and beyond just the applications so that 
you are actually able to effectively organize the different 
disciplines to work with each other.
    My favorite one, which I wrote a little bit about in the 
testimony, has five major layers from the bottom up: devices, 
modules, structures, virtualizations, and applications. Each of 
these is a major discipline in itself which works with all the 
other disciplines; and the most important thing is to look in, 
pick your favorite framework--that's my favorite one--and try 
to understand what the fundamental trends and limits are.
    So, for example, in devices, the fundamental trends and 
limits at the device level, these are actually running out of 
the ability to build integrated circuit technology with 
increasing performance and cost-effectiveness as we do it 
today. It costs billions of dollars to build the next VLSI 
product. You can save hundreds--many orders of magnitude when 
we transition to nano-scale self-organizing technologies. That 
may be 5 years before we get the first devices, but we 
certainly need the first new devices in that area.
    Assuming that you can do that, you have to think what are 
the new modules, units of replication, which, if we could have 
that new manufacturing capability, would we choose to have? If 
you had that, then what would be the new virtualizations, what 
would be the new system structures, and what would be the new 
applications?
    The interesting thing is what has happened is the 
transistor was invented and all the kinds of wonderful things 
happened after that. What we learned is that having multiple 
layers of the system work in parallel is way better than having 
them work in series. So if you have the basic and applied 
sciences working across the full range, from devices to 
applications through those intermediate levels, working on 
always the most important problems so the feedback would be not 
just produce the papers, produce real stuff, real system 
prototypes, real prototype products, real products which early 
adopters can use sooner rather than later and get the feedback 
to the system, you have the potential to bring the future into 
reality sooner rather than later.
    So I view this whole investment strategy as a kind of time 
machine. What you are actually doing with Federal R&D 
investment is getting an earlier view of the future than 
anybody else can, Getting it in the minds of the best 
scientists and engineers and businesspeople in the country and 
making it available to the United States and all the people of 
earth sooner rather than later. And doing one more thing: 
Through the American system, providing the incentives so it is 
used for good, as opposed to used for something else. So I 
can't imagine life without being on the frontier.
    Mr. Putnam. Dr. Lazowska.
    Dr. Lazowska. I think the simple answer to your question is 
``support IT R&D by Federal agencies at the level that the 
President's Information Technology Advisory Committee 
recommended in 1999.'' What you see from this graph that I 
showed you earlier is that we're increasing Federal R&D 
overall. What you see from this graph is that Federal R&D in 
information technology has flat-lined. It has fallen far below 
the PITAC recommendation, and it has flat-lined, and the good 
news is these are very small numbers. We are talking about only 
hundreds of millions of dollars a year. That is not an 
inconsequential amount of money, but on the scale in which the 
Federal Government operates or the Federal R&D operates, it is 
inconsequential.
    Our government has failed to prioritize this field. Simple 
as that. What you understand very well is the role that this 
field plays in our economy and in all other fields.
    Mr. Putnam. Dr. Fossum, anything to add?
    Dr. Fossum. Just sort of a random thought that came by. I 
look back at the history of some of the things that the U.S. 
Government has done in R&D over the last 50 or 60 years, and 
what it took to do it. We have a history of when something is a 
true priority nationally of essentially having a major program 
or an incubator on it. Go back and start with the Manhattan 
project and look at the form they took. If IT R&D is very 
important to this Nation, which I think we all agree it is, 
maybe we need to look at some models that we used before, 
rather than rely on the current funding streams of the current 
agencies. Maybe we need to rethink how better to pull the parts 
together.
    Mr. Putnam. You raised a good point, and I have forgotten 
most of what I learned in junior high and high school science. 
All of you operate, as Dr. Squires put it, on the frontier. 
There is a great deal of apprehension and concern about our 
inability to attract young people into the math, science, and 
engineering fields; and yet as far back as the Manhattan 
project we were pretty well co-opting the world's talent 
anyway. We were offering them freedom, a safe place to live, 
work, raise their family, and have a future and apply their 
brilliance to productive, hopefully peaceful things, although 
we could certainly have a whole other hearing on that.
    But how great a crisis is that? How big a threat is that? 
And how much attention should we be paying to it? Is it a 
natural demographic occurrence that China will produce an 
annual increase of more engineering degrees than the sum of all 
of our schools? Or is it truly a crisis in American higher 
education? We'll start with Professor Lazowska.
    Dr. Lazowska. One thing I would say we should make sure 
that our immigration policies are in line with the sorts of 
goals you have articulated. That is, do we allow the best 
students from around the world to come to the United States and 
get training? And do we allow them to remain in the United 
States once trained? If they return to their home countries, do 
we use them as agents of international cooperation or perhaps 
are we closing our borders and preventing these smartest minds 
from around the world from coming to us and learning?
    Mr. Putnam. Anyone else before we lose power?
    Dr. Scherlis. I just want to say that it is a serious issue 
and that many universities are struggling to develop strategies 
to attract the very best students into these fields. In our 
programs, we continue to get the very best students, but, in 
many other programs, there are challenges. We find, for 
example, that applications from overseas have gone down 
considerably because of this friction at the border.
    So, yes, this is definitely an issue. The most fundamental 
element of our supply chain is the people who populate it, and 
I think we need to take it up explicitly.
    Mr. Putnam. Dr. Squires, you and Dr. Scherlis, y'all were 
both recruited very early in your careers into government 
service and research?
    Dr. Squires. I was, essentially as a freshman 
undergraduate.
    Dr. Scherlis. I was on the faculty at Carnegie Mellon when 
I was recruited.
    Dr. Squires. But I recruited him.
    Dr. Scherlis. I thought it would be an easy desk job for a 
couple of years, and I could write papers in my spare time. But 
seriously, it was the most exciting and demanding thing I ever 
did. I stayed much longer than the usual tenure, and I continue 
to strongly recommend service. You talked about this with the 
earlier panel. We all feel the sense of possibility and 
opportunity to really do something significant for the Nation. 
There are many good reasons to take this up.
    Mr. Putnam. So high turnover is a fact of life in these 
fields? I mean, you said you stayed longer than normal.
    Dr. Scherlis. The IPA law, Interagency Personnel Act, 
allows a maximum stay of 4 years for somebody rotating in from 
a university or a State or local government. In fact, what I 
did was to stay on the IPA for 4 years; and then I rejoined as 
a senior executive government employee.
    Typically, rotators from universities to NSF or DARPA or 
other agencies will stay between 2 and 4 years and then return 
so that they don't lose continuity in their home institutions.
    Dr. Lazowska. I think it helps to be part of the research 
community, to work with the research community. So both NSF and 
DARPA have had great success with recruiting top members of the 
research community into being office directors and program 
managers for a period of time and then sending them back.
    Mr. Putnam. Dr. Fossum, and then we're going to wrap it up.
    Dr. Fossum. DARPA and NSF are stellar examples of this. 
That's not the case as I can see with a place like NASA where 
IT is very critical and where they have a large budget for R&D, 
but they are not real good at R&D partnering because they tend 
to deal more with contract-driven R&D, then grant-driven R&D. 
And the world you are talking about is where universities can 
coordinate with the Federal Government to cooperate and 
leverage the talent at universities is a ``grant driven'' world 
for the most part. In that world, you are talking about the 
``science program'' at Department of Energy. You are talking 
about NSF. You are talking about NIH.
    So just like we have a problem with the substantive 
border--perhaps we also need to take a look at how the R&D 
dollars move, and also, where the laboratories in the Federal 
Government will open their doors to various and sundry people. 
DARPA is world famous for this. World class. Maybe we need to 
use them as an example to teach a few other parts of the 
Federal Government how they might do that, too.
    Mr. Putnam. You pushed a button.
    Dr. Scherlis.
    Dr. Scherlis. Yes. I just want to present an alternative 
perspective about collaboration with NASA.
    Dr. Fossum. Oh, they do some. No doubt.
    Dr. Scherlis. I lead a project with NASA that involves 
Carnegie Mellon and five other universities, MIT, University of 
Southern California, University of Washington, University of 
Wisconsin, and University of Maryland. And that project is 
structured as a cooperative agreement which allows us to 
collaborate directly with NASA mission managers, mission 
engineers, and intramural researchers. We find that to be a 
very successful structure for collaboration. And I also want to 
note that at DARPA, at least to my knowledge, most of the 
relationships that they build with researchers at universities 
are framed as contracts or cooperative agreements. The nature 
of the vehicle through which the collaboration is undertaken, 
is I think, less important than the culture and horizon of the 
sponsoring organization.
    Mr. Putnam. Dr. Fossum's total agreement is noted for the 
record.
    Dr. Fossum. Yes. I just wanted to make one point. And the 
only point I was trying to make is that if you look at the 
proportion of, for instance, cooperative agreements, which are 
the vehicle that should be used, in some agencies, they haven't 
learned how to use them quite to the extent they might want to. 
NASA is an example of such an agency.
    Mr. Putnam. One of the things that I talk about in my 
Rotary Club speeches is when you look at the success of the 
American military and exponentially ahead of our competitors in 
a variety of fields, it's really because of the investments 
that the American people have made with their hard-earned tax 
dollars for decades that yields tremendous military prowess 
that then translates into the commercial sector. And, you know, 
people don't normally realize it until they hear it that they 
are shareholders in the success that ultimately not only raises 
our living standards but saves lives.
    Our society is not particularly good at recognizing and 
rewarding smart people, and yet it's the brilliant people in 
laboratories, in universities and in the Federal Government 
that just do tremendous things to make our lives easier, 
better, healthier, more productive and worthwhile. And one of 
the side effects, the positive side effects among many in the 
dot-com boom was that it kind of made it OK to be smart again. 
Working hard and being smart and attentive and paying attention 
to the sciences and math and computers, would get you a billion 
dollars or more in the case of some of them. And, hopefully we 
can find some way to tap into that generation of young people 
who have grown up seeing that and encourage them to continue to 
pursue their studies and academics and make it OK to be smart 
again.
    It's been a pleasure having such a smart panel showing 
their wisdom with us.
    Before we adjourn, I want to just convey to you the 
subcommittee's deepest appreciation for your accommodating us 
and dealing with the voting schedule. Your testimony is very 
important to our better understanding of Federal R&D, and we 
appreciate you.
    In the event that there may be additional questions that we 
do not have time for today, the record shall remain open for 2 
weeks for submitted questions and answers.
    Thank you all very much. The subcommittee is adjourned.
    [Whereupon, at 4:38 p.m., the subcommittee was adjourned.]
    [Additional information submitted for the hearing record 
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